AmEx profit misses as default worries prompt reserve buildup
American Express Co’s (AXP.N) first-quarter profit missed Wall Street estimates as the credit card giant set aside more money to cover potential losses stemming from cardholders falling behind on debt repayments.
Shares fell nearly 1% in premarket trading as AmEx raised its provisions to $1.1 billion in the quarter compared with a benefit of $33 million a year ago.
Stubborn inflation and a rapid rise in borrowing costs have begun to pinch customers of AmEx, which has so far been in a better position than its peers due to a wealthy customer base.
“We’re mindful of the mixed signals in the external environment,” Chief Executive Stephen Squeri said.
AmEx profit fell 13% to $1.8 billion, or $2.40 per share, for the three months ended March 31, missing analysts’ average estimate of $2.66 per share, according to Refinitiv data.
The company, however, reaffirmed its profit forecast for 2023. It expects to earn $11 to $11.40 per share compared to analysts’ estimate of $11.10.
This report’s information was first seen on REUTERS; to read more, click this link.