Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

AMX: American Exp.Co: American Express Second Quarter EPS up 10% to $1.27; Revenues, Cardmember Spending and Loan Portfolio



  AMX: American Exp.Co: American Express Second Quarter EPS up 10% to $1.27;
  Revenues, Cardmember Spending and Loan Portfolio Grow, Total Expenses up 1%

UK Regulatory Announcement

NEW YORK

American Express Company (NYSE: AXP) today reported second-quarter net income
of $1.4 billion, up 5 percent from $1.3 billion a year ago. Diluted earnings
per share was $1.27, up 10 percent from $1.15 a year ago.

(Millions, except per share amounts)
                                                                                   
                   Quarters Ended          Percentage     Six Months Ended          Percentage

                   June 30,                Inc/(Dec)      June 30,                  Inc/(Dec)
                   2013        2012                       2013         2012
Total Revenues
Net of             $ 8,245     $ 7,965     4 %            $ 16,126     $ 15,552     4 %
Interest
Expense
Net Income         $ 1,405     $ 1,339     5 %            $ 2,685      $ 2,595      3 %
Earnings Per
Common Share –
Diluted:
Net Income
Attributable       $ 1.27      $ 1.15      10 %           $ 2.42       $ 2.22       9 %
to Common
Shareholders^1
Average
Diluted Common       1,097       1,152     (5) %            1,101        1,158      (5) %
Shares
Outstanding
Return on            23.6        26.6                       23.6 %       26.6 %
Average Equity       %           %
                                                                                     

Second quarter consolidated total revenues net of interest expense rose 4
percent to $8.2 billion, from $8.0 billion a year ago. The increase reflected
higher cardmember spending and growth in the cardmember loan portfolio, which
helped to generate higher net interest income.

Consolidated provisions for losses totaled $593 million, up 29 percent from
$461 million a year ago. This increase primarily reflected lower reserve
releases this year, partially offset by the benefit of lower net write-offs.
Credit indicators continued to be at historically strong levels.

Consolidated expenses totaled $5.7 billion, up 1 percent from $5.6 billion
last year. The increase reflected higher rewards costs, driven by higher
cardmember spending. Expense levels for the quarter reflected, in part,
ongoing efforts to contain operating expenses^2 throughout the company.

The effective tax rate was 30 percent, up from 29 percent a year ago.

The company's return on average equity (ROE) was 23.6 percent, down from 26.6
percent a year ago.

“We generated record bottom line results this quarter despite an uneven global
economy,” said Kenneth I. Chenault, chairman and chief executive officer.
“Cardmember spending grew by 7 percent (8 percent adjusted for foreign
currency translations), with broad-based gains throughout the business both
here in the U.S. and internationally. We continued to build our cardmember
loan portfolio while maintaining credit indicators at historically strong
levels.

“We are well on track with the restructuring and related initiatives that we
announced earlier this year. They are helping us contain expense growth and
that, in turn, is giving us the flexibility to make substantial investments
designed to grow the business and expand into newer segments of the market.

“We continue to believe that maintaining a lean operating structure will be a
critical component of delivering shareholder value in the current
environment.”

Segment Results

U.S. Card Services reported second-quarter net income of $743 million, up 3
percent from $718 million a year ago.

Total revenues net of interest expense increased 5 percent to $4.2 billion,
from $4.0 billion a year ago. Revenues reflected higher cardmember spending
and a rise in net interest income that was driven by the growth in cardmember
loans.

Provisions for losses totaled $402 million, up 29 percent from $312 million a
year ago. The increase primarily reflected lower reserve releases this year,
partially offset by the benefit of lower net write-offs.

Total expenses were $2.7 billion, up 3 percent from $2.6 billion a year ago.
The increase primarily reflected higher rewards and marketing costs, partially
offset by lower operating expenses. The higher rewards costs were driven by
stronger cardmember spending.

The effective tax rate was 37 percent compared to 38 percent from a year ago.

International Card Services reported second-quarter net income of $208
million, up 17 percent from $178 million a year ago.

Total revenues net of interest expense were $1.3 billion, unchanged from a
year ago. Adjusted for foreign currency translations, revenues rose 3 percent
from the year ago quarter.^3

Provisions for losses totaled $116 million, up 23 percent from $94 million a
year ago. The increase primarily reflected lower reserve releases this year.

Total expenses were $1.0 billion, down 3 percent from $1.1 billion a year ago.
The decrease primarily reflected lower operating expenses. Adjusted for
foreign currency translations, expenses were down 1 percent compared to the
year ago quarter.^3

The effective tax rate was (33) percent compared to (22) percent a year ago.
The current period tax rate reflected the resolution of certain prior years'
tax items. The prior year’s tax rate reflected the realization of certain
foreign tax credits. In addition, tax rates in both quarters reflect recurring
permanent tax benefits allocable to the segment.

Global Commercial Services reported second-quarter net income of $226 million,
up 3 percent from $219 million a year ago.

Total revenues net of interest expense rose 1 percent to $1.2 billion. The
increase primarily reflected higher cardmember spending, partially offset by
lower business travel commissions and fees.

Total expenses were $853 million, down 4 percent from $886 million a year ago.
The decline primarily reflected lower salaries and employee benefits and other
operating expenses. Partially offsetting the decrease were higher rewards
costs during the quarter.

The effective tax rate was 32 percent compared to 27 percent a year ago. Last
year’s tax rate reflected the realization of certain foreign tax credits.

Global Network & Merchant Services reported second-quarter net income of $412
million, up 11 percent from $372 million a year ago.

Total revenues net of interest expense rose 5 percent to $1.4 billion, from
$1.3 billion a year ago. The increase reflected higher merchant-related
revenues driven by a rise in global cardmember spending.

Total expenses decreased 4 percent to $715 million, from $744 million a year
ago. The decline reflected lower operating expenses, as well as lower
marketing, promotion, rewards and cardmember services costs.

The effective tax rate was 36 percent compared to 34 percent a year ago.

Corporate and Other reported second-quarter net loss of $184 million compared
with net loss of $148 million in the year ago period.

About American Express

American Express is a global services company, providing customers with access
to products, insights and experiences that enrich lives and build business
success. Learn more at americanexpress.com and connect with us on
facebook.com/americanexpress, foursquare.com/americanexpress,
linkedin.com/companies/american-express, twitter.com/americanexpress, and
youtube.com/americanexpress.

Key links to products and services: charge and credit cards, business credit
cards, travel services, gift cards, prepaid cards, merchant services, business
travel, and corporate card.

The 2013 Second Quarter Earnings Supplement will be available today on the
American Express web site at http://ir.americanexpress.com. An investor
conference call will be held at 5:00 p.m. (ET) today to discuss second-quarter
earnings results. Live audio and presentation slides for the investor
conference call will be available to the general public at the same web site.
A replay of the conference call will be available later today at the same web
site address.

This release includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based
on the company's expected business and financial performance and are subject
to risks and uncertainties. Actual results may differ from those set forth in
the forward-looking statements due to a variety of factors, including those
contained in the company's Annual Report on Form 10-K for the year ended
December 31, 2012, its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2013 and the company’s other filings with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date on which
they are made. The company undertakes no obligation to update or revise any
forward-looking statements.

^1 Represents net income less earnings allocated to participating share awards
of $13 million and $14 million for the three months ended June 30, 2013 and
2012, respectively, and $24 million and $28 million for the six months ended
June 30, 2013 and 2012, respectively.

^2 Operating expenses represent salaries and employee benefits, professional
services, occupancy and equipment, communications and other expenses.

^3 As reported in this release, FX adjusted information, which constitute
non-GAAP financial measures, assume a constant exchange rate between the
periods being compared for purposes of currency translation into U.S. dollars
(i.e., assumes the foreign exchange rates used to determine results for the
three months ended June 30, 2013 apply to the period(s) against which such
results are being compared). The company believes the presentation of
information on an FX adjusted basis is helpful to investors by making it
easier to compare the company's performance in one period to that of another
period without the variability caused by fluctuations in currency exchange
rates.

All information in the following tables is presented on a basis prepared in
accordance with U.S. generally accepted accounting principles (GAAP), unless
otherwise indicated. Certain reclassifications of prior period amounts have
been made to conform to the current period presentation.

(Preliminary)
American Express Company
Consolidated Statements of Income
                                                                                           
(Millions)
                 Quarters Ended                               Six Months Ended
                 June 30,                    Percentage       June 30,                      Percentage
                 2013          2012          Inc/(Dec)        2013           2012           Inc/(Dec)
                                                                                                     
Revenues
Non-interest
revenues
Discount         $ 4,729       $ 4,482       6       %        $ 9,167        $ 8,739        5       %
revenue
Net card fees      647           615         5                  1,300          1,225        6
Travel
commissions        495           521         (5   )             932            972          (4   )
and fees
Other
commissions        605           575         5                  1,178          1,158        2
and fees
Other              567           651         (13  )             1,104          1,204        (8   )
Total
non-interest       7,043         6,844       3                  13,681         13,298       3
revenues
Interest
income
Interest on        1,622         1,582       3                  3,305          3,193        4
loans
Interest and
dividends on       52            67          (22  )             105            133          (21  )
investment
securities
Deposits with
banks and          20            22          (9   )             46             52           (12  )
other
Total interest     1,694         1,671       1                  3,456          3,378        2
income
Interest
expense
Deposits           107           115         (7   )             221            244          (9   )
Long-term debt     385           435         (11  )             790            880          (10  )
and other
Total interest     492           550         (11  )             1,011          1,124        (10  )
expense
Net interest       1,202         1,121       7                  2,445          2,254        8
income
Total revenues
net of             8,245         7,965       4                  16,126         15,552       4
interest
expense
Provisions for
losses
Charge card        201           163         23                 396            341          16
Cardmember         364           277         31                 639            489          31
loans
Other              28            21          33                 55             43           28
Total
provisions for     593           461         29                 1,090          873          25
losses
Total revenues
net of
interest           7,652         7,504       2                  15,036         14,679       2
expense after
provisions for
losses
                                                                                                     
Expenses
Marketing and      786           773         2                  1,407          1,404        -
promotion
Cardmember         1,601         1,462       10                 3,121          2,929        7
rewards
Cardmember         193           180         7                  382            374          2
services
Salaries and
employee           1,543         1,536       -                  3,158          3,171        -
benefits
Professional       763           711         7                  1,479          1,402        5
services
Occupancy and      460           446         3                  932            884          5
equipment
Communications     92            95          (3   )             188            191          (2   )
Other, net         219           422         (48  )             465            672          (31  )
Total              5,657         5,625       1                  11,132         11,027       1
Pretax income      1,995         1,879       6                  3,904          3,652        7
Income tax         590           540         9                  1,219          1,057        15
provision
Net income       $ 1,405       $ 1,339       5                $ 2,685        $ 2,595        3
Net income
attributable
to common        $ 1,392       $ 1,325       5                $ 2,661        $ 2,567        4
shareholders
(A)
Effective tax      29.6  %       28.7  %                        31.2   %       28.9   %
rate
                                                                                                     

(A) Represents net income, less earnings allocated to participating share
awards of $13 million and $14 million for the three months ended June 30, 2013
and 2012, respectively, and $24 million and $28 million for the six months
ended June 30, 2013 and 2012, respectively.
 

(Preliminary)
American Express Company
Condensed Consolidated Balance Sheets
                                                                 
(Billions)
                                                                             
                                                  June 30,        December 31,
                                               2013               2012
                                                                             
Assets
Cash & cash equivalents                        $    23            $   22
Accounts receivable                                 47                46
Investment securities                               5                 6
Loans                                               62                64
Other assets                                        15                15     
Total assets                                   $    152           $   153    
                                                                             
Liabilities and Shareholders' Equity
Customer deposits                              $    41            $   40
Short-term borrowings                               3                 3
Long-term debt                                      53                59
Other liabilities                                   36                32     
Total liabilities                                   133               134    
                                                                             
Shareholders' Equity                                19                19     
Total liabilities and shareholders' equity     $    152           $   153    
                                                                             

(Preliminary)
American Express Company
Financial Summary
                                                                                          
(Millions)
                Quarters Ended                               Six Months Ended
                June 30,                    Percentage       June 30,                      Percentage
                2013          2012          Inc/(Dec)        2013           2012           Inc/(Dec)
                                                                                                  
Total
revenues net
of interest
expense
U.S. Card       $ 4,239       $ 4,037       5     %          $ 8,321        $ 7,921        5     %
Services
International     1,299         1,297       -                  2,616          2,596        1
Card Services
Global
Commercial        1,231         1,221       1                  2,394          2,378        1
Services
Global
Network &         1,384         1,323       5                  2,687          2,571        5
Merchant
Services
                  8,153         7,878       3                  16,018         15,466       4
Corporate &       92            87          6                  108            86           26
Other
                                                                                                  
CONSOLIDATED
TOTAL
REVENUES NET    $ 8,245       $ 7,965       4                $ 16,126       $ 15,552       4
OF INTEREST
EXPENSE
                                                                                                  
Pretax income
(loss)
U.S. Card       $ 1,175       $ 1,149       2                $ 2,445        $ 2,329        5
Services
International     156           146         7                  349            342          2
Card Services
Global
Commercial        333           299         11                 616            543          13
Services
Global
Network &         647           562         15                 1,229          1,101        12
Merchant
Services
                  2,311         2,156       7                  4,639          4,315        8
Corporate &       (316  )       (277  )     14                 (735   )       (663   )     11
Other
                                                                                                  
PRETAX INCOME   $ 1,995       $ 1,879       6                $ 3,904        $ 3,652        7
                                                                                                  
Net income
(loss)
U.S. Card       $ 743         $ 718         3                $ 1,547        $ 1,470        5
Services
International     208           178         17                 386            375          3
Card Services
Global
Commercial        226           219         3                  417            396          5
Services
Global
Network &         412           372         11                 785            729          8
Merchant
Services
                  1,589         1,487       7                  3,135          2,970        6
Corporate &       (184  )       (148  )     24                 (450   )       (375   )     20
Other
                                                                                                  
NET INCOME      $ 1,405       $ 1,339       5                $ 2,685        $ 2,595        3
                                                                                                  

(Preliminary)
American Express Company
Financial Summary (continued)
                                                                                        
                                                                                                  
                Quarters Ended                               Six Months Ended
                June 30,                    Percentage       June 30,                    Percentage
                2013          2012          Inc/(Dec)        2013          2012          Inc/(Dec)
EARNINGS PER
COMMON SHARE
                                                                                                  
BASIC
Net income
attributable    $ 1.28        $ 1.16        10      %        $ 2.43        $ 2.23        9       %
to common
shareholders
                                                                                                  
Average
common shares     1,090         1,145       (5   )  %          1,094         1,151       (5   )  %
outstanding
(millions)
                                                                                                  
DILUTED
Net income
attributable    $ 1.27        $ 1.15        10      %        $ 2.42        $ 2.22        9       %
to common
shareholders
                                                                                                  
Average
common shares     1,097         1,152       (5   )  %          1,101         1,158       (5   )  %
outstanding
(millions)
                                                                                                  
Cash
dividends       $ 0.23        $ 0.20        15      %        $ 0.43        $ 0.40        8       %
declared per
common share
                                                                                                  
                                                                                                  
Selected Statistical Information
                                                                                                  
                Quarters Ended                               Six Months Ended
                June 30,                    Percentage       June 30,                    Percentage
                2013          2012          Inc/(Dec)        2013          2012          Inc/(Dec)
                                                                                                  
Return on
average           23.6  %       26.6  %                        23.6  %       26.6  %
equity (A)
Return on
average           23.4  %       26.3  %                        23.4  %       26.3  %
common equity
(A)
Return on
average
tangible          29.7  %       34.1  %                        29.7  %       34.1  %
common equity
(A)
Common shares
outstanding       1,084         1,139       (5   )  %          1,084         1,139       (5   )  %
(millions)
Book value
per common      $ 17.57       $ 16.92       4       %        $ 17.57       $ 16.92       4       %
share
Shareholders'
equity          $ 19.0        $ 19.3        (1   )  %        $ 19.0        $ 19.3        (1   )  %
(billions)
                                                                                                  

(A) Refer to Appendix I for components of return on average equity, return on
average common equity and return on average tangible common equity, a non-GAAP
measure.
 

(Preliminary)
American Express Company
Components of Return on Average Equity (ROE), Return on Average Common Equity
(ROCE),
and Return on Average Tangible Common Equity (ROTCE)
Appendix I
                                                                    
(Millions)
                 For the Twelve Months Ended
                    June       March       December     September       June
                 30,          31,          31,          30,          30,   
                 2013         2013         2012         2012         2012
                                                                      
ROE
                                                                      
Net income       $ 4,572      $ 4,506      $ 4,482      $ 5,037      $ 5,022
Average
shareholders'    $ 19,372     $ 19,426     $ 19,425     $ 19,145     $ 18,887
equity
Return on
average equity     23.6   %     23.2   %     23.1   %     26.3   %     26.6   %
(A)
                                                                      
Reconciliation
of ROCE and
ROTCE
                                                                      
Net income       $ 4,572      $ 4,506      $ 4,482      $ 5,037      $ 5,022
Earnings
allocated to
participating      45           46           49           56           57      
share awards
and other
Net income
attributable     $ 4,527      $ 4,460      $ 4,433      $ 4,981      $ 4,965   
to common
shareholders
                                                                      
Average
shareholders'    $ 19,372     $ 19,426     $ 19,425     $ 19,145     $ 18,887  
equity
Average common
shareholders'    $ 19,372     $ 19,426     $ 19,425     $ 19,145     $ 18,887  
equity
Average
goodwill and       4,128        4,181        4,232        4,272        4,330   
other
intangibles
Average
tangible
common           $ 15,244     $ 15,245     $ 15,193     $ 14,873     $ 14,557  
shareholders'
equity
Return on
average common     23.4   %     23.0   %     22.8   %     26.0   %     26.3   %
equity (A)
Return on
average
tangible           29.7   %     29.3   %     29.2   %     33.5   %     34.1   %
common equity
(B)
                                                                               

(A) Return on average equity and return on average common equity are
calculated by dividing one year period net income/net income attributable to
common shareholders by one year average total shareholders’ equity/average
common shareholders' equity, respectively.
 
(B) Return on average tangible common equity, a non-GAAP measure, is computed
in the same manner as return on average common equity except the computation
of average tangible common shareholders' equity, a non-GAAP measure, excludes
from average total shareholders' equity, average goodwill and other
intangibles. The Company believes that return on average tangible common
equity is a useful measure of the profitability of its business.
 

Media Contacts:
Marina Norville, +1-212-640-2832
marina.h.norville@aexp.com
Mike O’Neill, +1-212-640-5951
mike.o'neill@aexp.com
or
Investors/Analysts Contacts:
Ken Paukowits, +1-212-640-6348
ken.f.paukowits@aexp.com
Rick Petrino, +1-212-640-5574
richard.petrino@aexp.com

Contact:

American Express Company
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement