By Dhirendra Tripathi
Investing.com – American Express stock (NYSE:AXP) soared 8% Tuesday after the credit card issuer followed its fourth quarter beat with a bullish outlook for revenue and profit.
A spending surge helped revenue top $12 billion in the quarter, rising 30%. It also made the company set more aggressive targets.
AmEx now expects its 2022 revenue to rise 18% to 20%, nearly double of the +10% growth target it has set as its “2024+ Aspiration." Profit per share is seen coming in between $9.25 and $9.65 in the current financial year.
“Longer term, as the economy reaches a steady state, our aspiration is to achieve revenue growth in excess of 10 percent and EPS growth in the mid-teens,” Chief Executive Officer Steve Squeri said in a statement.
Net profit rose 20%, to $1.7 billion, with more expensive marketing eating into the revenue. Consolidated expenses were $9.8 billion, up 29% as the lender tried to bring in more customers while watching customers use more of its travel-related benefits. Increased compensation also kept operating expenses elevated.
Consolidated provisions for credit losses were $53 million, compared with a benefit of $111 million a year ago, reflecting lower reserve releases compared with a year ago. Credit metrics remain near historic lows, the company said.