American Express on Wednesday reported quarterly earnings and revenue that beat analysts’ expectations and raised its forecast for the year.
The company also announced that Stephen Squeri will succeed Kenneth Chenault as CEO, effective Feb.1, 2018.
Here’s how the company did in the third quarter compared with what Wall Street expected:
- EPS: $ 1.50 vs. $ 1.48 expected, according to Thomson Reuters
- Revenue: $ 8.44 billion vs. $ 8.285 billion expected, according to Thomson Reuters
The company also raised its full-year guidance and now expects earnings per share between $ 5.80 and $ 5.90. Analyst had previously forecast full-year earnings per share of $ 5.74, according to a Thomson Reuters consensus estimate.
In the year-earlier quarter, AmEx reported earnings of $ 1.20 per share on revenue of $ 7.77 billion.
“We are pleased to be able to both raise our earnings expectations while also funding some incremental investments aimed at driving moderate to long-term results,” said American Express CFO Jeffery Campbell during the earnings call. “We are seeing the payoff in our 2017 results with the strong and consistent performance over the first three quarters.”
The company’s stock initially gained as much as 1.5 percent after the report in after-hours trading but gave back those gains and was down modestly.
Incoming CEO Squeri also joined the call saying, “Our next chapter will be about building on the momentum we have generated with a special focus on innovation, expanding our core product offerings, enhancing our brand and our customer relationships and partnering with others to stay ahead of the curve.”
In September, the company said that it would be launching a new card, called Blue Delta SkyMiles, that’s aimed at new travelers, mainly millennials. Total engagement spending hit $ 3.1 billion in the third quarter, up 11 percent versus the prior year.
“As a reminder,” assured Campbell, “we expect marketing and promotion to be down significantly for the full year relative to 2016 as we realize efficiencies in our marketing spend.”
AmEx has been competing with JPMorgan Chase for customers willing to pay high fees. Chase’s widely popular Sapphire Reserve card wooed consumers with fat travel credits and other perks, such as airport lounge access.
But the company is also under increased scrutiny as the U.S. Supreme Court examines whether American Express is violating federal antitrust law. Eleven states have filed an appeal of a lower court ruling that the company could legally stop merchants from encouraging customers to use rival cards.
On Monday, American Express shares hit at a fresh 52-week intraday high of $ 93.35. As of its Wednesday close, the stock had surged roughly 24 percent since January.