01—Abstract
Summary
Summary of the 10-Q filed July 25, 2023. Cited figures are marked; the original filing is the authoritative source.
American Express Company (AXP) reported strong financial results for the second quarter of 2023, demonstrating resilience and growth across its core business segments.
Total revenues net of interest expense increased by a significant 12% year-over-year to $15.1 billiona, driven by robust Card Member spending and strong acquisition momentum. Net income rose 11% to $2.17 billion, or $2.89 per diluted share, surpassing the prior year's performance. The company experienced broad-based growth in network volumes, up 8% globally, with notable strength in Travel & Entertainment (T&E) spend, which grew 14%.
International Card Services saw particularly strong billed business growth of 15%b. While U.S. small and mid-sized enterprise (SME) spend growth continued to slow, overall revenue growth was healthy, supported by increased net card fees reflecting successful premium value proposition investments. Despite an increase in provisions for credit losses, driven by loan growth and higher net write-offs, the company emphasized that its credit metrics remain best-in-class and below pre-pandemic levels.
02—Key points
Key Highlights
- Total revenues net of interest expense increased 12% year-over-year to $15.1 billion.
- Net income grew 11% year-over-year to $2.17 billion, or $2.89 per diluted share.
- Worldwide network volumes increased by 8% year-over-year, driven by strong Card Member spending.
- Travel & Entertainment (T&E) spend saw a significant increase of 14% year-over-year.
- Net card fees increased by 21% year-over-year, reflecting successful investments in premium value propositions and strong new account acquisition.
- Provisions for credit losses increased significantly due to higher loan volumes and net write-offs, though credit metrics remain strong.
- American Express returned $1.6 billion to shareholders in the quarter through dividends and share repurchases.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2023filed July 25, 2023Financial Statements
Q2 FY2023 against Q2 FY2022
| Line item | Q2 FY2023Q2 FY2022 | Change |
|---|---|---|
| Revenue | $9.43B$8.77B | +7.5% |
| Interest Expense | $1.67B$439.00M | +280.4% |
| Net Income | $2.17B$1.96B | +10.7% |
| EPS (Basic) | $2.89$2.57 | +12.5% |
| EPS (Diluted) | $2.89$2.57 | +12.5% |
| Shares Outstanding (Basic) | 740.00M752.00M | −1.6% |
| Shares Outstanding (Diluted) | 741.00M753.00M | −1.6% |
05—Questions
Frequently Asked Questions
How did American Express's revenue and profitability perform in Q2 2023?
American Express reported a 12% increase in total revenues net of interest expense to $15.1 billion and an 11% rise in net income to $2.17 billion, or $2.89 per diluted share, compared to the second quarter of 2022.
What is driving the growth in Card Member spending?
Worldwide network volumes grew 8%, with Travel & Entertainment (T&E) spend showing a strong increase of 14%. U.S. Consumer Services and International Card Services also demonstrated healthy billed business growth.
Are there concerns about credit quality?
Provisions for credit losses increased significantly, primarily due to higher loan balances and increased net write-offs. However, American Express stated that its credit metrics remain best-in-class and below pre-pandemic levels, supported by its premium customer base and risk management capabilities.
How is American Express returning capital to shareholders?
In the second quarter of 2023, the company returned $1.6 billion to shareholders through $0.5 billion in common stock dividends and $1.1 billion in share repurchases.
06—Continue