American Express full-year profit forecast tops estimates

Investing.com -- American Express (NYSE:AXP) has unveiled a forecast for annual earnings that topped analyst projections, as the credit card provider said it expects to see continued business "momentum" driven by solid demand for its premium products.

The company guided for per-share profit of $12.65 to $13.15 this year, beating Bloomberg consensus estimates of $12.40. Revenue growth is also seen at between 9% to 11% in 2024.

In a statement, Chief Executive Stephen Squeri backed the firm's plan to achieve expansion of 10% or more in revenue and an increase in the "mid-teens" in income per share.

Shares climbed in premarket U.S. trading on Friday.

New York-based Amex posted record full-year 2023 revenue of $60.5 billion, a rise of 14% versus the prior year. Recently elevated borrowing costs have lifted net interest income, while card member spending also grew, reflecting ongoing resilience in consumer activity.

These trends helped to offset a more than doubling in provisions for credit losses. Consolidated expenses jumped by 10% to $45.1 billion as well, due in part to more cardholders taking advantage of travel benefits. Annual earnings per share moved up by 14% to $11.21.

Meanwhile, Amex revealed plans to increase its regular quarterly dividend by 17% to $0.70 a share beginning in the first quarter of this year.

Amex's update stood in contrast to a tepid current-quarter net revenue forecast from rival Visa (NYSE:V). For 2024, payments processor guided for "low double-digit" top-line growth and an income per share increase in the "low-teens."

Visa noted that activity particularly decelerated in the first week of January following a spell of extreme cold weather in many regions of the U.S. Shares in Visa edged down premarket on Friday.

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