Post-Earnings Review and Analysis - American Express

LONDON, October 17, 2014 /PRNewswire/ --

Investor-Edge.com has issued free post-earnings review on American Express Company (NYSE: AXP). On October 15, 2014, the company announced its financial results for Q3 FY14 (period ended September 30, 2014). Click on www.investor-edge.com/FreeReports to read our free earnings review on American Express. American Express reported net earnings growth of 8% on a Y-o-Y basis. Further, the company's Q3 FY14 diluted EPS increased $0.15 from the preceding year quarter. Our free coverage report can be accessed at:

www.investor-edge.com/register

Earnings Overview 

During Q3 FY14, American Express Co. reported net revenue of $8,329 million, compared to $8,301 million in the same period last year. The Company informed that last quarter (Q3 FY2013) included revenue from the company's business travel operations, which were deconsolidated as a result of the previously announced joint venture transaction that closed on June 30, 2014. The company's net revenue during the reported quarter came marginally below the Bloomberg analysts' forecast of $8,348 million. However, adjusted revenue grew 5%, excluding business travel revenues from the year-ago period, primarily reflecting higher Card Member spending and higher net interest income. The free research on AXP can be downloaded as in PDF format at:

www.Investor-Edge.com/AXPFreeReport

American Express Co.'s consolidated provisions for losses in Q3 FY14 were $488 million, up 16% compared to $419 million, reflecting a larger credit reserve release in the same quarter last year. Consolidated expenses however reduced to $5,595 million in Q3 FY14, down 5% compared to $5,878 million last year. The company's return on average equity (ROE) for the reported quarter was 28.8%, compared to 24.3% in Q3 FY13. American Express Co.'s net income broadened to $1,477 million, or $1.40 per diluted share in Q3 FY14, from $1,366 million, or $1.25 per diluted share in the year-ago quarter. Analysts from Bloomberg had expected the company to report net income of $1,422 million, or $1.36 per diluted share in Q3 FY14.

Kenneth I. Chenault, Chairman and CEO of American Express Co., commented that the company delivered solid financial results for another quarter, with card member spending up 9%, a modest acceleration from last quarter, and loan balances up 5%. He said that the company's revenues continued to rise at a steady pace, but the growth rate is still below its long-term target. Operating expense growth remained on track to come in well below the target for the full year, which he explained was one of the factors that provided the flexibility to invest in both the core business as well as some newer initiatives. Sign up and read the free analyst's notes on AXP at:

www.Investor-Edge.com/AXP-17102014

The CEO informed that the company has developed new partnerships and services with Uber, Apple Pay and McDonald's that are helping it to capitalize on the convergence of online and offline commerce. At the same time, initiatives like the Amex EveryDay Credit Card and OptBlue are helping the brand to become more welcoming and inclusive, as the company enters into markets not traditionally served by Amex, he claimed.

Chenault further said that the company has delivered solid earnings over the last couple of years through a combination of disciplined expense control, a strong balance sheet and targeted investments in growth initiatives. While the economy is stronger, it is not growing as fast or as steadily as most people would like, and those same levers will continue to be an important part of the company's strategy, he added.

The CEO concluded saying that the company's focus will be on delivering earnings growth in an environment that is characterized by rapidly changing technologies, intense competition, regulation and an economy that may continue to grow at only a modest pace. Visit Investor-Edge and access the latest research on AXP at:

www.Investor-Edge.com/AXPEarningsCoverage

Stock Performance 

On the last close, Thursday, October 16, 2014, American Express Co.'s stock finished the day at $80.24, down 0.85%, after vacillating between $78.81 and $81.47 during the session. A total of 9.14 million shares were traded, which was much above its three months average volume of 4.11 million shares. Over the previous three trading sessions and last one month, the company's shares have declined 3.07% and 9.19%, respectively. Also, the stock has lost 11.56% from the beginning of 2014. Shares in American Express Co. are trading below their 50-day and 200-day moving averages of $87.62 and $89.58, respectively. Furthermore, the stock traded at a PE ratio of 15.55 and has a Relative Strength Index (RSI) of 28.61.

Sneak Peek to Corporate Insider Trading 

In the last one month, seven insiders have made seven transactions on a single day by purchasing a total of 2,051 shares of the company worth $181,876.20 at an average price of $88.65. On September 30, 2014, Directors at American Express Co., Ronald A. Williams, Daniel L. Vasella and Frank P. Popoff, Samuel J. Palmisano and Theodore J. Leonsis, bought 451, 437 and 212, 296 and 155 shares, respectively at a price of $88.65, along with the other directors, Ursula M. Burns and Anne Lauvergeon, who bought 338 and 162 shares of the company at the same price. Complimentary in-depth research on AXP is available at:

www.Investor-Edge.com/AXPInsiderTrading

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