Earnings season: it can either cause a company to flourish, or to tumble. In the case of American Express, the latter is happening. On Wednesday, July 18, American Express posted its revenue for the second quarter, and not only did it not meet expectations, but the American Express Q2 revenue fell short of Wall Street forecasts.
For a company as prestigious as American Express, no one thought it would report revenue below expectations. Hence why the stock has dropped in after-hours trade.
American Express Q2 Revenue: Down, Down, Down
Don’t get me wrong, there were good things in the American Express earnings report. For instance, the company surpassed earnings expectations, bringing in $1.84 per share, while the Street thought AmEx would see $1.82 per share.
Plus, the company reiterated its 2018 full-year outlook, something which a lot of companies change depending on the success of the quarter. If the quarter is unfortunate, companies tend to alter their viewpoint. But AmEx didn’t.
For the full-year, AmEx forecasts earnings to come in between the range of $6.90 per share and $7.39 per share.
Here’s where things take a turn, though, for the payments company:
American Express reported that revenue for the second quarter came in at $10.00B. Yes, that’s still a hefty amount, but Wall Street was expecting $10.5B.
Other Important Numbers:
- Provisions for losses: $806M (up 38% from 2017)
- Expenses went up 7% to $7.1B
- Operating expenses dropped 2% Y-O-Y
The American Express Stock Price (NYSE:AXP):
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At market close, according to Yahoo Finance, American Express was trading at $102.98 on the NYSE, which means the stock closed up 1.81%.
But then the earnings report hit mainstream media, and the disappointment sparked a decline in after-hours trade. Currently, AmEx is down 2.89% on the NYSE in after-hours trade.
The Takeaway
What do you think of the American Express Q2 revenue? Do you think a company like AmEx should be bringing in more cash? Or, is the market overreacting? Let us know what you think of the American Express earnings report!
Featured Image: twitter
