Summary
American Express Company (AXP) reported strong performance for the third quarter of 2021, demonstrating significant recovery from the COVID-19 pandemic's impact. Total revenues net of interest expense increased by 25% year-over-year to $10.9 billion, driven by robust growth in discount revenue, which was up 34% due to higher card member spending. The company also benefited from a significant decrease in provisions for credit losses, which swung from a $665 million expense in the prior year to a $191 million benefit in the current quarter, reflecting improved portfolio quality and a strengthening macroeconomic outlook. Network volumes accelerated, increasing 29% year-over-year and exceeding pre-pandemic levels by 5%. While travel and entertainment (T&E) spending continued to recover, it remained below pre-pandemic levels, whereas Goods & Services (G&S) spend showed strong sequential growth and exceeded pre-pandemic levels by 20%. The company continued to invest strategically in marketing and value propositions to drive customer acquisition and retention, leading to higher expenses but supporting the overall revenue growth. American Express also highlighted its strong capital position, with capital ratios well above regulatory requirements, and plans to return capital to shareholders through dividends and share repurchases.
Financial Highlights
38 data points| Revenue | $7.14B |
| Interest Expense | $307.00M |
| Net Income | $1.83B |
| EPS (Basic) | $2.27 |
| EPS (Diluted) | $2.27 |
| Shares Outstanding (Basic) | 786.00M |
| Shares Outstanding (Diluted) | 787.00M |
Key Highlights
- 1Total revenues net of interest expense grew 25% year-over-year to $10.9 billion, driven by a 34% increase in discount revenue.
- 2Worldwide network volumes increased 29% year-over-year, exceeding pre-pandemic (Q3 2019) levels by 5%.
- 3Provisions for credit losses shifted from a $665 million expense in Q3 2020 to a $191 million benefit in Q3 2021, indicating improved credit quality and macroeconomic outlook.
- 4Goods & Services (G&S) related spending, a key driver of billed business, grew 18% year-over-year and is 20% above pre-pandemic levels.
- 5Travel and Entertainment (T&E) spending more than doubled year-over-year, though it remained 29% below pre-pandemic levels.
- 6Return on average equity (ROE) significantly improved to 32.6% in Q3 2021 from 15.3% in Q3 2020.
- 7The company returned $3.6 billion to shareholders in Q3 2021 through dividends and share repurchases, supported by a strong capital position with a CET1 ratio of 12.6%.