American Express Q1 EPS Rises 18% on $18.9B Revenue, Guidance Spurs Dip
American Express posted Q1 EPS of $4.28, an 18% year-over-year increase, on revenue of $18.91 billion, driven by 10% billed business growth and strong premium card spending. Shares fell over 2% after the company reaffirmed full-year revenue growth of 9–10% while boosting marketing and technology investments.
1. Q1 Earnings Surpass Estimates
American Express delivered Q1 EPS of $4.28, beating the $4.00 estimate, with revenue net of interest expense at $18.91 billion versus a $18.61 billion forecast. Net income rose to $2.97 billion from $2.58 billion a year earlier, reflecting an 11% revenue increase and robust fee income.
2. Premium Card Spending Drives Growth
Total billed business climbed 10% on a reported basis (9% FX-adjusted), fueled by a 10% surge in premium cardmember spending—the strongest quarterly rate in three years. Luxury retail spending grew 18%, premium airline cabin spend rose 12%, and global travel bookings hit record highs.
3. Rising Expenses and Investment Plans
Operating expenses increased 11% to $13.9 billion, driven by higher customer engagement costs, premium card benefits usage and technology upgrades. Credit loss provisions edged up to $1.3 billion from $1.2 billion, while new card acquisitions moderated to 3.1 million additions.
4. Outlook Reaffirmed, Stock Reaction
Management reaffirmed full-year revenue growth guidance of 9–10% and EPS between $17.30 and $17.90, opting against raising targets. The decision, coupled with plans to boost marketing and technology spending, prompted a more than 2% decline in share price.