American Express Company (NYSE:AXP) reported its earnings for the three months ended June 30 this afternoon, Wednesday July 17th, after the market closed. The company earned $1.27 per share in the quarter on revenue of $8.25. On today’s market, stock in American Express trended down, finishing the day at $76.80.
In the same three months of 2012 American Express Company (NYSE:AXP) managed to earn $1.15 per share for the quarter on revenue of $8 billion. Analysts studying the company were looking for earnings per share of $1.22 on revenue of $8.3 billion from today’s earnings report. In the hours leading up to the release of the report, whisper numbers indicated that the firm would earn a few cents above expectations.
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American Express Best In Show
So far in 2013, American Express Company (NYSE:AXP) has been the best investment by far in the credit card sector. Both of its larger rivals, Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA), are doing well, adding 24% and 20% to their value respectively in the last six months or so.
American Express Company (NYSE:AXP) has added more than 33% to shareholder value since January 1st. The company is benefiting from heightened consumer spending in the period, as well as a rebound from some poor performance in the latter half of 2012.
Credit card company’s earnings reports are widely used by analysts as a proxy for the health of the consumer economy as a whole. Credit card spending is the lifeblood of American consumption. Earnings from American Express Company (NYSE:AXP), Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA) tell analysts how well money is flowing around the economy.
Beginning with this report, and taking into account the Visa Inc (NYSE:V) report due on July 24 and Mastercard Inc (NYSE:MA) earnings due on July 31, analysts will create models for the level of consumer spending in the United States in the three months, and try to figure strategies based on their findings.
American Express operates differently than its rivals in that it issues credit cards rather than processes payments. This means there are many more revenue avenues open to the company—which make it a good indicator for some factors, like debt levels, that its rivals have little to do with.
American Express Company (NYSE:AXP) executives will host a conference call to discuss the earnings numbers at 5 p.m. this afternoon. Investors and analysts will likely concentrate on the report’s reflections on consumer spending.