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It’s still smooth sailing for American Express for the time being.
“We’ll see how the Fed does in sort of controlling that [inflation] with interest rate hikes as we go, but right now, I’m not seeing it [a recession],” American Express chairman and CEO Stephen Squeri told Yahoo Finance. “What I’m seeing right now is a sequential increase in spending quarter over quarter and month over month, and we’re seeing just this pent up demand to travel and people are spending and booking and so forth.”
The comments come in the wake of a much better than expected quarter from the card giant.
Here is how American Express (AXP) performed compared to Wall Street estimates:
Net Sales: $11.74 billion vs. $11.63 billion
Diluted EPS: $2.73 vs. $2.39
American Express saw top- and bottom-line growth within all its business segments as the global economy continued to improve from the pandemic. The results were paced by the Global Merchant Service segment. Sales rose 30% from a year ago to $1.4 billion. Pre-tax profits increased to $687 million from $385 million a year ago.
Profits at Amex’s Global Commercial Services segment notched a profit of $804 million from $675 million in 2021. Profits in the Global Consumer Services segment clocked in at $1.7 billion, compared with $2.1 billion a year earlier.
For 2022, Amex continues to see sales rising 18%-20% from the prior year. Earnings are pegged in a range of $9.25 to $9.65 per share.
Squeri downplayed the potential for a recession, with a few caveats.
“Is it a [recession] possibility? Yes,” Squeri said. “Is that a possibility in the next few months? If you’re looking at a recession, it might be more towards towards the end of the year, but it all depends on what the Fed does with interest rates and it also depends a lot on the supply chain.”