American Express's Strong Earnings Show That People Still Want to Pay to Use an Amex

Ben Walsh Earnings Report Financials AXP American Express Credit Types/Services Credit Cards Banking/Credit Financial Services Financial Technology Electronic Payment Systems Technology North America United States Financial Performance Earnings Earnings Surprises Corporate/Industrial News Content Types Factiva Filters C&E Industry News Filter AXP I/XFFX M/FCL M/TEC N/CNW N/DJN N/ERN N/PFM N/WER R/NME R/US Barrons.com Barrons Blogs Wires Fortune 500 CODES_REVIEWED Earnings Report Financials author Ben Walsh author|Ben Walsh topicid 8572 name Ben Walsh extractedtext Ben Walsh rank 1 codetype author code ben_walsh nameformat surname_first author Ben Walsh id Ben Walsh barrons_display_brand BAREARNREP barrons_display_brand|BAREARNREP codetype BARRONS_DISPLAY_BRAND canbedisplaybrand true value BAREARNREP source MANUAL status modified name Earnings Report code BAREARNREP barrons_display_subject BARFINANCIALS barrons_display_subject|BARFINANCIALS codetype BARRONS_DISPLAY_SUBJECT 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n_wer editorial-seo-id american-expresss-earnings-strong-card-fees-51579883117 editorial-seo-id|american-expresss-earnings-strong-card-fees-51579883117 first_publish_headline American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex first_publish_headline|American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex flow NWREGULAR flow|NWREGULAR codetype FLOW value NWREGULAR source MANUAL status modified name Wires code NWREGULAR flow Barrons.com flow|Barrons.com codetype FLOW value Barrons.com source MANUAL status modified name Barrons.com code online name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW value Barrons Blogs title Product source MANUAL status modified name Barrons Blogs code Barrons_Blogs headline American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex headline|American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex idx 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Industry News Filter why lineage source FACTIVA internalsymbol true fcode nfcpin codetype ns code nfcpin nwchain SB524870592174447945463045861606109042881341 nwchain|SB524870592174447945463045861606109042881341 re usa re|usa significance prominent name United States why about source FACTIVA subcat cntry fcode usa codetype re code usa onlinesignificance prominent re namz re|namz name North America why lineage source FACTIVA subcat snr fcode namz codetype re code namz relay SYND relay|SYND name Syndication source EXPANDER value SYND codetype RELAY code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject BARFINANCIALS subject|BARFINANCIALS ruleid BARFINANCIALS codetype SUBJECT value BARFINANCIALS canbedisplaysubject true name Financials title Financials status modified code BARFINANCIALS subject BAREARNREP subject|BAREARNREP ruleid BAREARNREP codetype SUBJECT value BAREARNREP canbedisplaybrand true name Earnings Report title Earnings Report status modified code BAREARNREP wordcount 347 wordcount|347 id facebook id|facebook news_tab_url https://www.barrons.com/articles/american-expresss-earnings-strong-card-fees-51579883117 Photograph by Justin Sullivan/Getty Images American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex American Express’s Earnings Were Strong. The Stock Is Higher.

Card fees were the fastest-growing revenue item for American Express in 2019.

American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex

Card fees were the fastest-growing revenue item for the company in 2019.

https://www.barrons.com/articles/american-express-stock-looks-like-it-had-a-great-year-appearances-can-be-deceiving-51577797200?mod=article_inline https://www.barrons.com/articles/american-express-reports-earnings-heres-what-to-expect-51579790733 mailto:ben.walsh@barrons.com American Express’s Strong Earnings Show That People Still Want to Pay to Use an Amex By Ben Walsh Photograph by Justin Sullivan/Getty Images American Express stock rose almost 5% in the wake of the news,

American Express reported fourth-quarter results that surpassed analysts’ expectations for earnings per share and showed that consumers are still willing to pay for Amex cards despite intensifying competition.

American Express stock (ticker: AMEX) rose almost 5% in the wake of the news, disclosed Friday morning.

The company said it earned $2.03 a share from revenue of $11.4 billion during the quarter. According to FactSet, Wall Street had expected the company to report EPS of $2.01 and $11.4 billion in revenue.

Importantly, the company’s results showed that consumers are still willing to pay to have an Amex card. Seventy percent of new American Express cardholders choose cards with a fee, which can offer benefits such as cash back on purchases or frequent-flier miles.

And that preference is helping American Express’s financial results. Card fees were the fastest-growing revenue item for the company in 2019, and management said on a conference call with investors that it expects that trend to continue this year. Card-fee revenue grew 17% in 2019 and 20% year over year in the fourth quarter.

American Express has tried to become less reliant on charge cards and corporate accounts, its historical mainstays. The company appears to be pulling off that shift, which involves expanding the consumer credit-card business to generate more interest revenue. Its credit-card customers’ apparent preference for cards with fees will make that business stronger by providing a base of revenue that isn’t necessarily dependent on consumers rolling over unpaid balances.

Write to Ben Walsh at ben.walsh@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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