American Express has reported very healthy Q1 2023 net income of $1.8 billion, or $2.40 per share, consolidated total revenues net of interest expense were $14.3 billion – a record for American Express.
“Our first-quarter results reflect strong growth in Card Member spending and continued high engagement with our premium products, tracking with the full-year 2023 guidance we provided in January, which we are reaffirming today, for revenue growth of 15% to 17% and earnings per share of $11.00 to $11.40,” said Stephen J. Squeri, Chairman and Chief Executive Officer.
“Revenue grew 22% from a year earlier to reach a quarterly record, as Card Member spending rose 16% on an FX-adjusted basis.
Travel and Entertainment spending was particularly robust, growing 39% on an FX-adjusted basis and in March, we saw a record level of reservations booked on our Resy restaurant platform.
We also saw an acceleration in spending in our International Card Services segment, which increased 29% on an FX-adjusted basis. Spending on Goods and Services around the globe grew 9% on an FX-adjusted basis.
We acquired 3.4 million new cards during the quarter, with US Consumer Platinum and Gold, US Business Platinum, and Delta co-brand account acquisitions all reaching record levels.
Demand from Millennial and Gen Z consumers continues to fuel this growth, accounting for more than 60% of all new consumer account acquisitions in the quarter.
Millennial and Gen Z customers also continued to be our fastest growing US cohort in terms of spending, growing 28% from a year earlier.
Our customers have been resilient thus far in the face of slower macroeconomic growth, elevated inflation and higher interest rates, with credit performance remaining best-in-class. That said, we’re mindful of the mixed signals in the external environment.
Based on our performance to date and the momentum we see in our business, we remain confident in our ability to achieve our longer-term growth plan aspirations,” Squeri concluded.
Q1 consolidated total revenues net of interest expense were $14.3 billion, up 22% from $11.7 billion a year ago. The increase was primarily driven by increased Card Member spending, as well as higher net interest income, reflecting higher average loan volumes.
Consolidated provisions for credit losses were $1.1 billion, reflecting higher net write-offs and a net reserve build of $320 million.
Consolidated provisions for credit losses in the prior year significantly benefited from the release of pandemic-driven reserves. Credit metrics remained strong in the current quarter.
Consolidated expenses were $11.1 billion, up 22% from $9.1 billion a year ago. The increase primarily reflected higher customer engagement costs, driven by higher network volumes and increased usage of travel-related benefits.
Operating expenses also increased, primarily reflecting higher compensation costs and a loss on Amex Ventures investments of $95 million.
The consolidated effective tax rate was 16.2%, down from 22.6% a year ago, primarily reflecting discrete tax benefits related to the resolution of prior-year tax items in the current quarter.
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