01—Abstract
Summary
Summary of the 10-Q filed October 18, 2024. Cited figures are marked; the original filing is the authoritative source.
American Express Company (AXP) reported solid financial results for the third quarter and first nine months of 2024, demonstrating continued momentum and the strength of its business model.
Total revenues net of interest expense increased by 8%a for the quarter and 9% year-to-date, driven by strong billings growth across its segments, particularly in International Card Services and U.S. Consumer Services. The company saw robust new card acquisitions and sustained excellent credit performance, with net write-off and delinquency rates remaining best-in-class. Key drivers for revenue growth included a 4% increase in Discount revenue, a 18% surge in Net card fees reflecting strong acquisition and retention, and a 16% rise in Net interest income, attributable to growth in revolving loan balances.
Marketing expenses increased significantly by 19% for the quarter to support customer acquisition and growth initiatives, while overall operating expenses grew at a slower pace (5%) than revenue, underscoring expense discipline. The company successfully returned $2.4 billionb to shareholders in the third quarter through dividends and share repurchases, maintaining its capital ratios within its target range.
02—Key points
Key Highlights
- Total revenues net of interest expense grew 8% year-over-year for Q3 2024 to $16.6 billion, and 9% year-over-year for the nine months ended September 30, 2024, to $48.8 billion.
- Net income for Q3 2024 was $2.51 billion, or $3.49 per diluted share, a 2% and 6% increase, respectively, compared to the prior year.
- Billed business increased by 6% year-over-year for Q3 2024, with strong performance in U.S. Consumer Services and International Card Services.
- Net card fees accelerated to an 18% year-over-year increase in Q3 2024, driven by high new card acquisitions and retention.
- Provisions for credit losses increased by 10% for Q3 2024, primarily due to higher net write-offs, though net write-off and delinquency rates remain strong.
- Marketing expense increased by 19% in Q3 2024, reflecting continued investment in customer acquisition and growth initiatives.
- The company returned $2.4 billion to shareholders in Q3 2024 through share repurchases ($1.9 billion) and dividends ($0.5 billion).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 18, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $9.72B$9.38B | +3.6% |
| Net Income | $2.51B$2.45B | +2.3% |
| EPS (Basic) | $3.50$3.30 | +6.1% |
| EPS (Diluted) | $3.49$3.30 | +5.8% |
| Shares Outstanding (Basic) | 708.00M732.00M | −3.3% |
| Shares Outstanding (Diluted) | 709.00M733.00M | −3.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in Q3 2024?
Revenue growth was primarily driven by an 8% increase in total revenues net of interest expense. This was supported by a 6% increase in billed business, a 18% increase in net card fees due to strong card acquisition and retention, and a 16% increase in net interest income driven by higher revolving loan balances.
How did American Express manage its expenses in Q3 2024?
While marketing expenses increased by 19% to support customer acquisition, overall operating expenses grew by a more modest 5% year-over-year, which is a slower pace than revenue growth. This indicates continued operating expense discipline alongside strategic investments.
What is the company's stance on credit quality and provisions for losses?
American Express reported that its net write-off and delinquency rates remained best-in-class and relatively in line with prior quarters, supported by its premium customer base and risk management. However, provisions for credit losses increased by 10% due to higher net write-offs, partially offset by a lower net reserve build compared to the prior year.
How is American Express returning capital to shareholders?
In the third quarter of 2024, American Express returned $2.4 billion to shareholders, consisting of $1.9 billion in share repurchases and $0.5 billion in common stock dividends. The company plans to continue returning excess capital while managing its capital ratios.
06—Continue