American Express released its latest earnings report after closing bell tonight, posting earnings of $1.39 per share on revenue of $9.11 billion, a 7% year over year increase. Analysts had been expecting the credit card services company to post earnings of $1.38 per share on $8.53 billion in revenue.
Key metrics from American Express’ earnings report
The credit card service company reported $5.9 billion in net income for the full year, a 10% year over year increase. Earnings per share were $5.56 for the full year, a 14% increase from the previous year’s $4.88 per share.
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Management cited gains from the sale of the company’s Concur Technologies investment and an increase in spending by card members, as well as higher net interest income. Unsurprisingly, American Express was also hit by the strengthening of the U.S. dollar against foreign currencies. The company reported a 29.1% rate of return on average equity, compared to the previous year’s 27.8%. revenues net of interest expenses rose 4% to $34.3 billion.
Card member spending increased 6%, or 8% when adjusted for foreign exchange rates. For the first time, volumes surpassed the trillion dollar mark, according to American Express management.
The company’s U.S. Card Services segment saw net income decline 23% to $665 million. International Card Services saw its net income fall 68% to $33 million, while Global Commercial Services saw its net income rise to $594 million for the fourth quarter. The company’s Global Network and Merchant Services segment saw its net income rise 5% to $417 million in the quarter.
The Corporate and Other segment saw net losses of $262 million for the quarter, compared to net losses of $240 million in the same quarter a year ago. American Express took restructuring charges during the quarter.
American Express plans job cuts
American Express is also reportedly planning to cut 4,000 jobs, according to CNBC. The media network reported that a spokesperson said that number is “only a gross figure” and that some parts of the company will still be hiring.
Shares of American Express dipped as much as 2% after tonight’s earnings report.