American Express Company (NYSE: AXP)
On 21, 2016, American Express Company, arguably the most well respected credit card issuer in the world, reported their quarterly earnings after the market closed, and immediately saw the negative reaction to companies missing their analyst earnings expectations. Shares, which had traded mainly flat during the regular trading session -closing down only $0.39 a share at $62.54, saw their shares spiral downward to the tune of-3.66% at the close of aftermarket trading at $60.35 per share.
American Express’s Numbers
American Express reported net income of $5.2 billion, down from $5.9 billion year-over-year. Ironically, adjusted earnings of $1.23 per share were $0.10 higher than the consensus expectations across many analysts. This, however, didn’t help the aftermarket trading as noted above
The strong appreciation in the U.S. dollar has had an adverse impact on revenue and profits for more than a year now. AmEx pointed to higher spending levels among its cardmembers to explain gains in the adjusted revenue figures, and loss provisions declined slightly from year-ago levels. Returns on average equity fell by more than five percentage points, to 24%, and about a third of the drop came from the restructuring charges. -The Motley Fool
In the price chart below -which represents each day’s high / low and close from January 2015 , please note the channel trendline angled at a downward 45 degree position with red arrows and green arrows showing support and resistance.Note how prices have respected those lines. However after today’s earnings announcement it is clear that American Express will not avoid and break down through lower trendline in the morning when trading resumes on Friday. Savvy traders will likely also be watching how competitors Visa (V) and Mastercard(MA) react in the morning.
According to Chairman and CEO Kenneth I. Chenault, “pressures on merchant fees, the evolving regulatory environment and intense competition that have been re-shaping the payments industry” are responsible for American Express’ 2015 performance. He noted that the EPS targets he outlined did not include restructuring costs or other contingencies. Benzinga
American Express Company, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. The company operates through four segments: U.S. Card Services, International Card Services, Global Commercial Services, and Global Network & Merchant Services. Its products and services include charge and credit card products; payments and expense management products and services; consumer and business travel services; stored value products, such as travelers cheques and other prepaid products; and network services. The companys products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale, and marketing and information products and services for merchants; fraud prevention services; and the design of customized customer loyalty and rewards programs. American Express Company sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through direct mail, online applications, in-house and third-party sales forces, and direct response advertising. The company was founded in 1850 and is headquartered in New York, New York. -Yahoo Finance