Tag: spending

AmEx issues dismal outlook on business travel spending as profit slumps

By Niket Nishant



a close up of a sign: Pedestrians walk past an American Express sign in New York


© Reuters/LUCAS JACKSON
Pedestrians walk past an American Express sign in New York


(Reuters) – American Express Co on Friday warned that business travel spending would not pick up before early 2022 after reporting underwhelming third-quarter profit due to weak spending on travel and entertainment by its card users.

In what appears to be a shift in strategy, the New York-based credit card issuer, for long a preferred choice of affluent Americans, walked back on its cost-cutting target of nearly $3 billion in 2020 and decided to spend heavily to add new card customers.

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“We’re all consistent in terms of how we feel about business travel, which is probably not going to (pick up) till late 2021, early 2022,” Chief Executive Officer Stephen Squeri said in a post-earnings conference call with analysts.

Credit card companies have been hit hard as the pandemic-induced recession forces companies to lay off workers and consumers to stay at home, drastically reducing their purchasing power.

Spending on its cards fell 19% to $248.7 billion in the quarter, with travel and entertainment related spending sliding 69% from a year earlier.

AmEx, which has tie-ups with large airlines and hotels and whose largest shareholder is Warren Buffett’s Berkshire Hathaway Inc , set aside $665 million in loss provisions during the quarter.

However, it was still lower than what it set aside last quarter, as the outlook for potential defaults improved, with AmEx saying that overall spending volumes had shown a “steady recovery” since the lows of mid-April.

Online consumer retail spending was a bright spot for the card issuer during the quarter, clocking a 32% jump over last year.

Non-travel and entertainment spending, which comprises most of the spending on AmEx’s network and includes online and offline retail spending, inched up 1% from a year ago after adjusting for cross-currency fluctuations.

Quarterly profit fell 40% to $1.07 billion, or $1.30 per share, missing analysts’ average estimate of $1.35 per share, according to Refinitiv data, hurt mainly by higher expenses.

Total revenue, excluding interest expense, fell 20% to $8.8 billion, but came in ahead of muted expectations.

AmEx shares, which have lost about 16% of their value so far this year, fell 3.5% after reporting results.

(Reporting by Niket Nishant in Bengaluru; Writing by Noor Zainab Hussain; Editing by Shailesh Kuber and Arun Koyyur)

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AmEx profits plunge as travel spending comes to a standstill

American Express’ fourth-quarter profits dropped by 39% as the pandemic’s deep impacts on travel, entertainment and dining dramatically impacted results of the credit card giant

CHARLOTTE, N.C. — American Express’ fourth-quarter profits dropped by 39%, the credit card giant said Friday, as the pandemic’s deep impacts on travel, entertainment and dining dramatically impacted the company’s results.

The New York-based company earned $1.07 billion, or $1.30 a share, down from $1.76 billion, or $2.08 per share, in the same period a year earlier. The results missed analysts’ forecasts, who were looking for AmEx to earn $1.39 a share, according to Zacks Investment Research.

“We recognize that the road ahead continues to be uncertain,” said AmEx CEO Stephen Squeri, in a prepared statement.

The company is also facing consumers and small businesses, hit hard by the pandemic or preparing for more tough times, cutting back spending and cutting up cards. The average spending on an AmEx card fell to $4,486 from $5,630 a year earlier. The average numbers of cards was 90.8 million in the quarter, down from 93 million a year earlier.

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Locky Gilbert remains optimistic ahead of spending mandatory hotel isolation with Irena Srbinovska

‘Hopefully she looks at me the same’: Locky Gilbert remains optimistic as he prepares to spend a mandatory 14 days in hotel isolation with Irena Srbinovska as they arrive in Perth

The Bachelor couple Locky Gilbert and Irena Srbinovska have been inseparable since going public with their romance last month.

And on Sunday, Locky, 31, remained optimistic as he revealed the couple have to spend another 14 days together in mandatory hotel isolation upon arriving in Perth.

Sharing a loved-up photo alongside his winning lady, Locky wrote: ‘Hopefully Irena still looks at me the same after 14 days stuck in a room with me.’

The Bachelor's Locky Gilbert (left) remains optimistic as he gears up to spend a mandatory 14 days in isolation with Irena Srbinovska (right) as they arrive in Perth

The Bachelor’s Locky Gilbert (left) remains optimistic as he gears up to spend a mandatory 14 days in isolation with Irena Srbinovska (right) as they arrive in Perth

In the image, the smitten couple are seen holding onto each other’s arms as they gaze into each other’s eyes, while smiling ear-to-ear.

On Friday, the 31-year-old nurse, who hails from Melbourne, revealed she had finally arrived in WA after her travel permit was approved.

‘After many attempts we’re finally in Perth. I had to apply for a G2G like everyone else and it wasn’t easy. I was rejected time and time again but it was finally approved,’ she wrote.

'Hopefully Irena still looks at me the same after 14 days stuck in a room with me,' Locky wrote alongside a loved-up photo with his winning lady on Sunday

‘Hopefully Irena still looks at me the same after 14 days stuck in a room with me,’ Locky wrote alongside a loved-up photo with his winning lady on Sunday

A G2G pass allows individuals to apply for a travel exemption to enter Western Australia for an approved purpose.

Irena explained: ‘I didn’t get any special consideration because of the show. My application was examined like everyone else’s.’

She now plans to relocate her ‘entire life’ to Perth, where she has lined up a nursing job.

Announcement: The 31-year-old nurse, who hails from Melbourne, shared the exciting news to Instagram on Friday, revealing she had arrived in WA after her travel permit was approved

Announcement: The 31-year-old nurse, who hails from Melbourne, shared the exciting news to Instagram on Friday, revealing she had arrived in WA after her travel permit was approved 

She said: ‘I am relocating my entire life here, I will be working as a nurse and this is a permanent move hence why I believe I was given my pass.

‘So now we are starting our two week quarantine… wish us luck.’

It comes several weeks after Irena spoke to The Project about her plans to relocate from Melbourne to Perth to be with Locky.  

'We are finally here!' Irena finally moved to Perth with her boyfriend, Locky, a month after the season finale aired

‘We are finally here!’ Irena finally moved to Perth with her boyfriend, Locky, a month after the season finale aired

She said: ‘I am relocating my entire life here, I will be working as a nurse and this is a permanent move hence why I believe I was given my pass.

‘So now we are starting our two week quarantine… wish us luck.’

It comes several weeks after Irena spoke to The Project about her plans to relocate from Melbourne to Perth to be with Locky.   

New life: Irena plans to relocate her 'entire life' to Perth, where she has lined up a nursing job

New life: Irena

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