01—Abstract
Summary
Summary of the 10-Q filed April 19, 2024. Cited figures are marked; the original filing is the authoritative source.
American Express Company (AXP) reported strong financial results for the first quarter of 2024, with net income increasing by 34% year-over-year to $2.4 billiona, and diluted earnings per share rising 39% to $3.33.
This performance was driven by robust revenue growth, with total revenues net of interest expense up 11% to $15.8 billionb. The company saw broad-based increases in billed business across its U.S. Consumer Services and International Card Services segments, which grew 8% and 11% respectively (13% FX-adjusted). Net interest income also saw a significant increase of 26%, primarily due to growth in revolving loan balances and higher interest rates.
The company maintained a strong credit profile, with net write-off and delinquency rates described as best-in-class, supported by its premium customer base and disciplined risk management. Provisions for credit losses increased primarily due to higher net write-offs, though this was partially offset by a lower net reserve build.
American Express continued to return capital to shareholders, with $1.6 billionc returned through share repurchases and dividends, including a 17% increase in its quarterly common stock dividend. The company also announced an agreement to sell its subsidiary Accertify Inc., anticipating a significant pre-tax gain upon closing in the second quarter of 2024.
02—Key points
Key Highlights
- Net income increased 34% to $2.4 billion, with diluted EPS up 39% to $3.33.
- Total revenues net of interest expense grew 11% to $15.8 billion.
- Billed business increased 6% overall, with strong growth in U.S. Consumer Services (8%) and International Card Services (11%).
- Net interest income rose 26%, driven by higher loan balances and interest rates.
- Provisions for credit losses increased 20% due to higher net write-offs, but credit quality metrics remain strong.
- Returned $1.6 billion to shareholders via share repurchases ($1.1 billion) and dividends ($0.5 billion), increasing the quarterly dividend by 17%.
- Agreement reached to sell fraud prevention solutions provider Accertify Inc., expecting a significant pre-tax gain.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 19, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $9.34B$8.85B | +5.6% |
| Interest Expense | $2.01B$1.43B | +40.0% |
| Net Income | $2.44B$1.82B | +34.2% |
| EPS (Basic) | $3.34$2.41 | +38.6% |
| EPS (Diluted) | $3.33$2.40 | +38.8% |
| Shares Outstanding (Basic) | 721.00M743.00M | −3.0% |
| Shares Outstanding (Diluted) | 722.00M744.00M | −3.0% |
05—Questions
Frequently Asked Questions
How did American Express's revenue perform in Q1 2024?
American Express reported a significant increase in total revenues net of interest expense, up 11% year-over-year to $15.8 billion. This growth was driven by higher billed business across key segments, a 15% increase in net card fees, and a 26% rise in net interest income due to increased loan balances and higher interest rates.
What is the company's credit quality situation?
The company highlighted that its net write-off and delinquency rates remain best-in-class, supported by its premium customer base and strong risk management. Provisions for credit losses increased by 20% primarily due to higher net write-offs, but the overall credit portfolio is performing well relative to industry standards.
How is American Express returning capital to shareholders?
American Express returned $1.6 billion to shareholders in the first quarter of 2024 through $1.1 billion in share repurchases and $0.5 billion in common stock dividends. The company also announced a 17% increase in its quarterly common stock dividend, signaling confidence in its ongoing capital generation and return strategy.
Are there any significant divestitures or strategic changes mentioned?
Yes, American Express announced an agreement to sell its subsidiary Accertify Inc., a fraud prevention solutions provider. The transaction is expected to close in the second quarter of 2024 and is anticipated to result in a substantial pre-tax gain, which the company plans to reinvest back into its business.
06—Continue