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Picture: BLOOMBERG
Picture: BLOOMBERG

American Express is putting the pandemic behind it, boosting forecasts for revenue and profit after spending on its cards surged to a record. 

Revenue will climb as much as 20% this year while earnings could reach $9.25-$9.65 a share, the company said on Tuesday.

Amex has been saying that 2022 would be the year it reaches goals originally set two years ago, before the pandemic took hold. But the new targets far surpass even those goals, which predicted revenue growth in the range of 8%-10% and per-share profit of $8.85-$9.25. 

“We are raising our aspiration to generate sustainable revenue and earnings growth,” CEO Steve Squeri said. “Longer term, as the economy reaches a steady state, our aspiration is to achieve revenue growth in excess of 10% and earnings-per-share growth in the mid-teens.”

Overall spending on Amex’s network soared 29% to $368.1bn in the final three months of last year, even as the highly contagious Omicron variant disrupted holiday plans worldwide and started a fresh round of lockdowns. The spending surge helped push revenue up 30% to $12.1bn in the quarter, which was higher than analysts had predicted.

The company's share price rose 3.2% to $164.06 at 2.06pm in early New York trading.

Amex also said it will raise its quarterly dividend for the first time since 2019, boosting the payout 20% to 52c a share beginning this quarter.   

Amex, long known for its travel and dining perks, has been revamping some of its most popular products and focusing more on wellness and lifestyle benefits as the pandemic drags on. When it overhauled its Platinum card last year, the New York-based company added statement credits for entertainment products, such as SiriusXM or Audible subscriptions, as well as $25 a month towards membership with the high-end fitness club Equinox. 

The company has vowed to spend more on marketing in recent quarters as it seeks to add new customers. Overall costs jumped 29% to $9.8bn, topping the $9.31bn average estimate. 

Amex is pursuing a “new growth plan that will enable us to continue investing at high levels in our customers, brand and talent”, Squeri said. “Our performance to date and the lessons we have learned have strengthened our conviction in this strategy.”

Bloomberg News. More stories like this are available on bloomberg.com

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