AmEx lifts 2024 profit forecast on robust spending by affluent customers
Recasts with forecast in paragraph 1
July 19 (Reuters) -Credit card giant AmericanExpress AXP.N raised its full-year profit forecast on Friday,as its wealthy customers persisted in splurging on travel, dining and entertainment.
The company also reported better-than-expected second-quarter profit, underscoring the benefit it has enjoyed by focusing on a premium customer base.
AmEx's affluent cardholders havesomewhat insulated it from weakness in the broader economy, even as rival lenders warn of tepid demand due to elevated borrowing costs.
"Increased scale, combined with our premium, high credit quality customers, our well-controlled expense base and our successful investments... fuels the earnings power of the core business," CEO Stephen Squeri said in a statement.
The company sees its 2024 earnings per share between $13.30 and $13.80, versus the $12.65 to $13.15 range it had forecast earlier. In the second quarter ended June 30, profitwas $3.02 billion, or $4.15 per share, 39% higher than a year ago.
Excluding a one-time gain from the sale ofits fraudprevention technology unit, Accertify, the company earned $3.49 per share, higher than analysts' estimate of $3.24 per share, according to LSEG data.
Revenue jumped 9% to a record $16.33 billion, but fell short of an LSEG estimate of $16.59 billion.Shares of the New York-based company fell 2% in premarket trading.
Last month, the company agreed to buy restaurant-booking platform Tock from Squarespace SQSP.N to expand its foothold in the dining industry.
The acquisition could support AmEx's efforts within the small-and-medium-enterprise market, according to analysts.
AmEx views the segment as lucrative despite a recent slowdown in SME spending growth.
Reporting by Niket Nishant in Bengaluru; Editing by Pooja Desai
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