American Express Company (NYSE: AXP) today reported first-quarter net income of $2.2 billion, or $2.74 per share, compared with net income of $367 million, or $0.41 per share, a year ago. The results reflected the impact of $1.05 billion ($802 million after tax) in credit reserve releases(2) , primarily driven by continued improvements in the macroeconomic outlook and strong credit performance.

 
           (Millions, except percentages and per share amounts) 
 
                                              Quarters Ended     Percentage 
                                                 March 31,        Inc/(Dec) 
                                            -------------------  ---------- 
                                                 2021     2020 
------------------------------------------      ------   ------  ---------- 
Total Revenues Net of Interest Expense       $   9,064  $10,310     (12) 
------------------------------------------      ------   ------  ---------- 
Total Provisions for Credit Losses           $   (675)  $ 2,621      # 
------------------------------------------      ------   ------  ---------- 
Net Income                                   $   2,235  $   367      # 
------------------------------------------      ------   ------  ---------- 
Diluted Earnings Per Common Share(1)         $    2.74  $  0.41      # 
------------------------------------------      ------   ------  ---------- 
Average Diluted Common Shares Outstanding          805      808     (0) 
------------------------------------------      ------   ------  ---------- 
# - Denotes a variance of 100 percent or more. 

“I am pleased with our results in the first quarter, where we saw continued improvements in our core business along with best-in-class credit performance, and I’m especially encouraged by the progress we’re making to rebuild our growth momentum going forward,” said Stephen J. Squeri, Chairman and Chief Executive Officer.

“Card member spending excluding travel and entertainment categories was 11 percent higher on an FX-adjusted basis than it was in the first quarter of 2019, and continues to represent the majority of spend on our network. We’ve also seen an uptick across all categories of travel and entertainment spending in the U.S. in recent weeks, increasing our confidence that domestic consumer travel will continue to recover.

“We view 2021 as a transition year, where we are focused on making investments to rebuild growth momentum in our core business. We’ve fired up our card acquisition engine, adding 2.1 million new proprietary cards during the quarter. Also, the additional value we provided on several of our premium products is helping to drive increased Card Member engagement, and our attrition rates and customer satisfaction levels remain better than pre-pandemic levels.

“Our investments to scale next horizon opportunities are well underway. We began the rollout of the Kabbage digital platform to our small business customers, and through our joint venture in China, we have now added more than 14 million merchants to our network.

“Given the progress we’ve seen thus far and clear indicators that the economy is improving, I’m even more confident in our roadmap to achieve our aspiration of returning to the original EPS expectations we had for 2020 in 2022.”

First-quarter consolidated total revenues net of interest expense were $9.1 billion, down 12 percent from $10.3 billion a year ago. The quarter primarily reflected declines in Card Member spending and loan volumes, as well as a lower average discount rate compared to the prior year.

Consolidated provisions for credit losses resulted in a benefit of $675 million, primarily reflecting the previously mentioned reserve releases and lower net write-offs, compared with a provision expense of $2.6 billion a year ago, which primarily reflected significant credit reserve builds.

Consolidated expenses were $6.7 billion, down 7 percent from $7.2 billion a year ago, reflecting lower customer engagement costs(3) and operating expenses.(4) Customer engagement costs were down due to the decline in Card Member spending and lower usage of travel-related Card Member benefits, partially offset by marketing investments the company made to rebuild growth momentum. The decrease in operating expenses was primarily driven by gains related to certain Amex Ventures equity investments, partially offset by higher deferred and other compensation costs.

The consolidated effective tax rate was 25.3 percent, up from 18.8 percent a year ago. The increase primarily reflected the impact of certain discrete tax benefits in relation to lower pretax income in the prior year.

Global Consumer Services Group reported first-quarter pretax income of $2.1 billion, compared with $231 million a year ago.

Total revenues net of interest expense were $5.3 billion, down 11 percent from $6.0 billion a year ago. The decrease primarily reflected declines in Card Member spending and loan volumes compared to the prior year.

Provisions for credit losses resulted in a benefit of $504 million, primarily reflecting a portion of the previously mentioned reserve releases and lower net write-offs, compared with a provision expense of $1.8 billion a year ago, which primarily reflected significant reserve builds.

Total expenses were $3.7 billion, down 6 percent from $3.9 billion a year ago. The decrease primarily reflected lower customer engagement costs due to a decline in Card Member spending and lower usage of travel-related Card Member benefits, as well as lower operating expenses, partially offset by marketing investments to rebuild growth momentum.

Global Commercial Services reported first-quarter pretax income of $665 million, compared with $19 million a year ago.

Total revenues net of interest expense were $2.7 billion, down 14 percent from $3.1 billion a year ago, primarily reflecting a decline in Card Member spending.

Provisions for credit losses resulted in a benefit of $162 million, primarily reflecting a portion of the previously mentioned reserve releases and lower net write-offs, compared with a provision expense of $762 million a year ago, which primarily reflected significant reserve builds.

Total expenses were $2.1 billion, down 7 percent from $2.3 billion a year ago. The decrease primarily reflected lower client incentives and other customer engagement costs due to a decline in Card Member spending, partially offset by marketing investments to rebuild growth momentum.

Global Merchant and Network Services reported first-quarter pretax income of $414 million, compared with $551 million a year ago.

Total revenues net of interest expense were $1.2 billion, down 13 percent from $1.4 billion a year ago. The decrease reflected declines in Card Member spending and the average discount rate compared to the prior year.

Total expenses were $807 million, up 2 percent from $789 million a year ago, driven by higher marketing and promotion investments, partially offset by lower network partner payments due to a decline in Card Member spending.

Corporate and Other reported a first-quarter pretax loss of $210 million, compared with a pretax loss of $349 million a year ago.

About American Express

American Express is a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, instagram.com/americanexpress, linkedin.com/company/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

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