American Express, the New York City-based credit-card company, announced solid financial results for the second quarter. Despite the ongoing pandemic, the company witnessed increased consumer spending in the areas of travel, entertainment, and restaurants.
Financial Highlights
- Net income for the quarter stood at $2.17 billion, or $2.89 per share, compared to $1.96 billion, or $2.57 per share, in the same period last year. This surpassed analysts’ expectations of $2.81 per share.
- Revenue saw a healthy 12% growth, reaching $15.05 billion. However, it fell slightly short of analysts’ projected revenue of $15.41 billion.
Strong Performance in Travel and Entertainment
Stephen Squeri, the Chief Executive of American Express, revealed that travel and entertainment spending experienced a notable 14% increase when adjusted for foreign exchange. He also highlighted the company’s achievements in the restaurant and consumer-travel sectors.
- The Resy restaurant-booking platform witnessed record-high reservations during the quarter.
- Bookings made through American Express’ consumer-travel business reached their highest levels since before the pandemic.
Credit Loss Provisioning
To account for potential credit losses, American Express provisioned $1.20 billion during this quarter, compared to $410 million in the same period last year.
Market Performance
Following the earnings announcement, American Express shares dipped by 3.3% during premarket trading, settling at $171.36.
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