American Express Provides Update on the Impact of COVID-19
March 17 2020 - 9:17AM
Business Wire
American Express Company (NYSE: AXP) today hosted an Investor
Update Call, where the company’s senior executives discussed recent
business trends and long-term strategies. The company also provided
an update on the impact of COVID-19 (or coronavirus) on its
financial performance.
American Express has been closely monitoring the COVID-19
situation and its broader impact on the global economy. While
performance in January and February of this year largely showed
strong momentum consistent with 2019, the company observed softness
in spending volumes in the last few days of February. This softness
has accelerated into March and spread more globally. Accordingly,
American Express now expects its first-quarter revenue growth to be
in the range of 2 to 4 percent on an FX-adjusted basis,1 and
adjusted earnings per share to be in the range of $1.90 to $2.10,
excluding reserve builds in the quarter.2
Given the ongoing uncertainty surrounding the duration,
magnitude and geographic reach of COVID-19, American Express is not
able to forecast its future financial results beyond the first
quarter at this time. The company plans to provide further updates
on the COVID-19 impact on its first-quarter earnings call in April.
The company is focused on ensuring the health and safety of its
colleagues around the world, serving its Card Members and
merchants, and supporting those in need.
“American Express has a long runway to deliver strong, long-term
performance, driven by our differentiated business model and our
focus on our strategic imperatives,” said Stephen J. Squeri,
Chairman and Chief Executive Officer. “We have a long track record
of navigating through uncertain economic periods by focusing on our
disciplined operational and strategic execution, our dedicated
colleagues, and the deep relationships we have with our customers
and partners. We will continue our strategy of investing in share,
scale and relevance, and we are focused on running the company for
the long term.”
# # #
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.
Key links to products, services and corporate responsibility
information: charge and credit cards, business credit cards, travel
services, gift cards, prepaid cards, merchant services, Accertify,
InAuth, corporate card, business travel, and corporate
responsibility.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
which are subject to risks and uncertainties. The forward-looking
statements, which address American Express Company’s current
expectations regarding business and financial performance,
including management’s first quarter 2020 FX-adjusted revenue and
adjusted EPS guidance, among other matters, contain words such as
“expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,”
“should,” “could,” “would,” “likely” and similar expressions.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on
which they are made. The company undertakes no obligation to update
or revise any forward-looking statements. Factors that could cause
actual results to differ materially from these forward-looking
statements, include, but are not limited to, further deterioration
of spending on our cards and an inability or unwillingness of Card
Members to pay amounts owed to the company; a further slowdown in
corporate and T&E spending; deteriorating economic conditions
and macroeconomic factors such as unemployment rates and the volume
of bankruptcies; changes in monetary, fiscal or tax policy to
address the impact of COVID-19; regulatory measures or voluntary
actions, including emergency restrictions, event cancellations,
closures, travel bans and border controls, that may be put in place
to limit the spread of COVID-19, which could affect the company’s
business activities, result in changes to business practices or
alter behaviors of Card Members, partners and merchants; an
inability of the company to manage risk or control expenses, which
could be impacted by increases in cyberattacks, fraud, legal costs
and Card Member reimbursements; restructurings; impairments;
unanticipated tax items; further market volatility and changes in
capital and credit market conditions, foreign currency rates and
interest rates; an inability of our business partners to meet their
obligations due to slowdowns or disruptions in their businesses or
otherwise; and telecommunications failures or internet outages
impacting transaction authorization, clearing and settlement
systems. Many of the foregoing risks and uncertainties are, and
will be, exacerbated by the COVID-19 pandemic and any worsening of
the global business and economic environment as a result. A further
description of these uncertainties and other risks can be found in
American Express Company’s Annual Report on Form 10-K for the year
ended December 31, 2019 and the company’s other reports filed with
the Securities and Exchange Commission.
1 FX-adjusted information assumes a constant exchange rate
between the periods being compared for purposes of currency
translations into U.S. dollars (e.g., assumes the foreign exchange
rates used to determine results for the quarter ending March 31,
2020 apply to the period(s) against which such results are being
compared).
2 The company’s first quarter adjusted EPS guidance, a non-GAAP
measure, excludes the portion of Provisions for losses attributable
to reserve build. The amounts of reserves are determined at the
balance sheet reporting date and management is not able to estimate
such amounts at this time due to the rapidly changing nature of,
and uncertainty related to, macroeconomic forecasts that are a
component of the new Current Expected Credit Loss (CECL)
methodology.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200317005395/en/
Media Contact: Marina H. Norville,
Marina.H.Norville@aexp.com, +1.212.640.2832 Investors/Analysts
Contacts: Vivian Y. Zhou, Vivian.Y.Zhou@aexp.com,
+1.212.640.5574 Melanie L. Michel, Melanie.L.Michel@aexp.com,
+1.212.640.5574
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