Will Brexit Impact American Express Company (NYSE:AXP) Earnings?

American express company axp brexit
Photo Credit: SimonQ???, Flickr

American Express Company (AXP) Financials – Consumer Finance | Reports July 20, After Market Closes

Key Takeaways

  • The Estimize consensus is calling for earnings per share of $1.92 on $8.23 billion in revenue, $25 million higher than Wall Street on the top line
  • The recent breakup with Costco is estimated to cost Amex $80 billion in billed business and 20% of its interest bearing credit portfolio
  • American Express is the worst performing credit card company this year with shares down nearly 8%.
  • What are you expecting for AXP? Get your estimate in here!

American Express, or Amex for short, is scheduled to report first quarter earnings tomorrow after the market closes. Amex is coming off a fourth quarter in which it beat on the bottom line but missed its sales target. Revenue has been a recurrent problem and has fallen short in the last 8 consecutive quarters, or 2 fiscal years. Unfortunately, early indications look bleak heading into its first quarter earnings.

The Estimize consensus is calling for earnings per share of $1.92 on $8.23 billion in revenue, $25 million higher than Wall Street on the top line. Compared to a year earlier this represents a 28% increase in earnings while sales are expected in relatively flat. Investor’s looking for a quick pop will be disheartened to learn that the stock typically trends sideway during earnings season. American Express has prone to many swings in the financial services sector, most notably higher global macroeconomic risks. The fallout from Brexit has many experts believing worldwide consumer spending is in for a rude awakening. Consumer confidence has already taken a hit immediately following the vote which poses a problem for the entire payments industry.

Meanwhile, Amex is still coping with the loss of the Costco account to Visa. The third quarter will provide the first meaningful signs on how earnings will be impacted after the divorce. It hasn’t helped that that payments industry is very competitive and rapidly evolving. Within the space, Visa, MasterCard, American Express and Discover compete each other for new partnerships. Shares of American express are down 8% since the start of the year, the most amongst its peers.
Do you think AXP can beat estimates? There is still time to get your estimate in here!

Photo Credit: SimonQ???