CEO Ken Chenault Comments on American Express 4Q 2016 Earnings Report

American Express 4Q Earnings

 Jeff Campbell, Executive Vice President and Chief Financial Officer at American Express, during a webcast of American Express's 4Q earnings report said that they plan to "increase spending on growth initiatives." 

"We ended the year in a stronger position than when we started it," he said during the call. Credit and auto loans are doing well for American Express. American Express desires to market to small businesses in 2017.  2016 was " better than expected, " said Mr. Campbell. American Express card holders increased the enjoyment of the airport lounge benefits. Card billed business increased too which may be a small sign that consumer spending is increased in the last quarter of President Obama's term. "For the full year, the company reported net income of $5.4 billion, up 5 percent from $5.2 billion a year ago," the earnings per share press release from American Express delivered. 

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“At the start of 2016 we said we would move with a strong sense of urgency to change the trajectory of our business,” said Kenneth I. Chenault, chairman and chief executive officer.

 “The results we’re reporting today reflect substantial progress on that commitment. Revenue performance strengthened sequentially and showed year-over-year growth on an adjusted basis. We are ahead of plans to reset our cost base and improve our operating efficiency. We were able to make substantial investments to capitalize on opportunities in the marketplace and strengthen our competitive position.

“Earnings per share for 2016 were well above the range we provided at the start of the year and consistent with our revised outlook from last quarter. Our underlying business performance gave us the flexibility to significantly ramp up marketing and promotion initiatives that have been targeted to provide a mix of returns over the short, medium and longer term.

“Card Member spending (adjusted for Costco and the impact of foreign exchange rates) grew 7 percent in the fourth quarter. That increase reflects continued strength in our international markets, accelerated growth among small and mid-sized companies and strong long-term relationships with higher spending consumers. We continued to grow our lending portfolio faster than the market while maintaining industry-leading credit metrics. We acquired over 10 million new cards globally last year, and we added more than a million new merchants to our network in the United States alone.

“While we continue to operate in a very challenging environment, we ended the year in a stronger position than we started and have built momentum across our business. There is still more work to do, but given our progress to date, we expect EPS for 2017 to be between $5.60 and $5.80. That outlook is built on a set of priorities designed to put us in a strong position for 2018 and the years ahead.”