RESOLVING THE LEDGER
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Shares of American Express (NYSE: AXP) plummeted more than 6% in last Friday's morning trading. What's going on? Well, the iconic charge card company issued its second-quarter results, and while revenue and earnings growth were strong, rising expenses worried investors.
Amex reported revenue net of interest expense of $19.6 billion, 10% higher than the same period a year ago. That was driven by higher card member marketing expenses -- up about 9% -- during the quarter. Earnings per share rose 11%, to $4.53, about $0.12 higher than analysts expected.
But there was one thing the market really didn't like. The company said expenses grew 12% year over year in the quarter to $14.5 billion, from $12.9 billion a year ago. That higher level will continue through the end of 2026, CFO Christophe Le Caillec said on a call with analysts.
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