American Express reported second quarter net income of $2.0 billion, or $2.57 per share, compared with net income of $2.3 billion, or $2.80 per share, a year ago.
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“We had an outstanding second quarter, with record levels of revenue and Card Member spending, reflecting the strength of our global customer base and continued momentum across our business,†said Stephen J. Squeri, Chairman and Chief Executive Officer.
“Card Member spending was up 30 percent from a year earlier on an FX-adjusted basis, driven by the robust rebound in global Travel and Entertainment spending, which surpassed pre-pandemic levels for the first time in April and was led by strong growth in consumer and SME spending and a significant uptick in corporate travel. Goods and Services spending, which is the largest category of spending on our network, continued its strong growth in the quarter, and spending by Millennial and Gen Z Card Members increased 48 percent on an FX-adjusted basis over last year.
“We added 3.2 million new proprietary cards in the quarter, driven by continued strong demand for our premium products. Acquisitions of our U.S. Consumer Platinum, Gold and Delta co-brand Cards each reached all-time highs in the quarter, and we have maintained high levels of customer retention. Our credit performance remains exceptional, with delinquencies and write-offs near historical lows.
“We have been able to deliver exceptional results while navigating a complex macroeconomic environment because of a number of factors, including the scale and strength of our global customer base, the decisions we made through the pandemic and recovery to support our customers and seize on growth opportunities, and our continued focus on enhancing our value propositions and bringing new customers into the franchise. As we look ahead, we remain confident in our ability to successfully execute against our long-term growth plan aspirations.â€
Second-quarter consolidated total revenues net of interest expense were $13.4 billion, up 31 percent from $10.2 billion a year ago. The increase primarily reflected growth in Card Member spending compared to the prior year.
Consolidated provisions for credit losses were $410 million, compared with a benefit of $606 million a year ago. The change primarily reflected a small net reserve build in the current quarter compared with a $866 million reserve release a year ago. Credit metrics remained near historic lows in the current quarter.
Consolidated expenses were $10.4 billion, up 32 percent from $7.9 billion a year ago. Customer engagement costs increased, primarily driven by a 25 percent increase in network volumes and higher usage of travel-related benefits. Operating expenses also increased, reflecting net gains on Amex Ventures investments in the prior year and increased compensation costs.
The consolidated effective tax rate was 22.8 percent, up from 22.4 percent a year ago.
Based on performance to date, the company is raising its full-year revenue growth guidance from a range of 18% to 20% to a range of 23% to 25%; the company is maintaining its full-year EPS guidance range of $9.25 to $9.65. ■