LONDON, UK / ACCESSWIRE / October 25, 2016 / Active Wall St. announces its post-earnings coverage on American Express Co. (NYSE: AXP). The company posted its financial results for the third quarter fiscal 2016 on October 19, 2016. The company reported stronger-than-expected earnings and revenue and raised its 2016 adjusted earnings forecast. Register with us now for your free membership at: http://www.activewallst.com/register/.
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For the quarter ended on September 30th, 2016, American Express reported that net income was $1.1 billion, down 10% from $1.3 billion a year ago. On per share basis, the company reported diluted earnings per share of $1.20 in the reported quarter, down 3% from $1.24 in Q3 2015. Excluding a restructuring charge related to cost reduction efforts, adjusted diluted earnings per share came in at $1.24. Over the past 12 months, the company has repurchased 72 million shares which have driven a 7% reduction in the average share count.
For Q3 2016, American Express reported consolidated total revenues net of interest expense of $7.8 billion, lower by 5% from $8.2 billion in the year earlier period. Excluding the impact of Costco-related revenues in the year ago-period, adjusted revenues net of interest expense increased 5%, reflecting a rise in Card Member spending, along with higher net interest income and net card fees. The results topped Wall Street's expectations of earnings of $0.97 per share on revenue of $7.71 billion.
Consolidated expenses were $5.5 billion, down 3% from $5.7 billion a year ago. The prior year included Costco-related rewards costs, and an impairment of goodwill and technology assets.
American Express's net interest income declined 11% on lower reported loans while up 10% on an adjusted basis. Adjusted loans were up 12% and net interest yield on card member loans increased year-over-year. These impacts were partially offset in net interest income by higher funding costs related to the charge card portfolio due to an increase in interest rates versus last year. Net interest income represented 17% of the company's total revenues during Q3 2016.
The company raised its full-year adjusted earnings forecast to $5.90-$6.00 per share from $5.40-$5.70 per share and reaffirmed its 2017 forecast, driven by faster than expected progress on its cost-cutting initiatives. Analysts expect the company to earn $5.50 per share in 2016, according to Thomson Reuters I/B/E/S.
For Q3 2016, American Express' U.S. Consumer Services reported net income of $401 million, down 26% from $542 million a year ago. Total revenues net of interest expense fell 13% to $2.9 billion, from $3.3 billion in Q3 2015.
The Company's International Consumer and Network Services segment's net income increased 1% to $155 million compared to $154 million a year ago. Total revenues net of interest expense were $1.4 billion, up 5% or 7% on constant currency basis from $1.3 billion a year ago. The increase primarily reflected higher Card Member spending and net card fees.
Net income for American Express' Global Commercial Services segment in Q3 2016 remained unchanged to $466 million. Total revenues net of interest expense were $2.4 billion, unchanged from a year ago. Global Merchant Services earnings declined 10% to $359 million from $397 million a year ago. Total revenues net of interest expense were $1.1 billion, down 6% from $1.2 billion in Q3 2015. Meanwhile the Corporate and Other unit reported net loss of $240 million compared with net loss of $295 million a year ago.
On Monday, the stock closed the trading session at $67.09, slightly falling 0.40% from its previous closing price of $67.36. A total volume of 5.14 million shares have exchanged hands, which was higher than the 3-month average volume of 4.36 million shares. American Express' stock price advanced 5.60% in the last month, 4.75% in the past three months, and 2.37% in the previous six months. The stock is trading at a PE ratio of 11.88 and has a dividend yield of 1.91%.
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