American Express Company (NYSE:AXP) released its earnings numbers for the three months through March 2014 this afternoon. The company showed earnings of $1.33 per share for the first quarter of the year. Revenue in the period came to $8.20 billion. On today’s market the company’s stock trended upward, and finished trading at $87.40.
In the run-up to the release of these figures, Businessweek surveyed 21 analysts following the company. According to their consensus estimates, the company was expected to earn $1.30 per share in the first quarter of the year. Revenue was expected to come in at $8.36 billion for the period. In the first quarter of 2013, American Express Company (NYSE:AXP) earned $1.15 per share on revenue totaling $7.9 billion.
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American Express continues earnings growth
American Express Company (NYSE:AXP) has been on a great run in recent years, expanding revenue year on year, and bringing better-than-expected earnings to shareholders in most of its recent earnings reports.
Firms in the financial sector have had a hard time this earnings season, and that certainly played into the decisions made by traders on the way into American Express Company (NYSE:AXP) earnings. Credit cards are, however, a very different business from banking.
The most important factor in American Express Company (NYSE:AXP)’s health is activity in the consumer economy. That means that although management may not be directly responsible for most of the swings in revenue from year to year, they have a role in deciding the strategy of the company, and deciding what direction it should grow in.
Consumer credit grows as economy recovers
American Express Company (NYSE:AXP) will always be susceptible to the whims of the wider market. The company processes payments by consumers and enterprise by and large. That means that less economic activity can’t help but reduce the amount of money that American Express brings in in any given period. The first quarter of 2014 saw the economy appear to grow at a steady pace, but other factors, like the monstrous cold spell, have negatively affected the company’s earnings.
In line with the weather’s effect on revenue, and a more widespread negative mood prevailing across the market, shares in American Express Company (NYSE:AXP) have lost more than 35 of their value since 2014 began. The company has suffered from a high multiple, thrust upon it by an extremely active market in 2013, and shakiness in the world economy owing to worries about the health of the Chinese economy and the situation in the Ukraine.
American Express Company (NYSE:AXP) executives will hold a conference call at 5 PM EDT in order to discuss this afternoon’s earnings release.