AmEx plays down Omicron impact as spending hits record levels

Wednesday, 2 February 2022 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: American Express Co’s finance chief last week played down the Omicron coronavirus variant’s impact on travel spending after a surge in volumes helped the credit-card giant sail past quarterly profit expectations.

Spending on AmEx cards hit record levels in the fourth quarter as consumers led by Millennials and Gen Z splurged more on pre-pandemic habits like dining out and international holidays.

Chief Financial Officer Jeff Campbell said in an interview he expected the trend to continue in 2022 as the Omicron variant only had a modest impact on travel spending.

“When you think about the Delta variant in 2021, and now as you see Omicron in early 2022, each of those impacts has been a little milder than the one before, and we believe shorter in duration,” Campbell said.

AmEx expects net revenue growth of between 18% and 20% in 2022 and earnings per share of $ 9.25 to $ 9.65.

In the quarter to Dec. 31, spending on travel and entertainment on AmEx cards more than doubled. That pushed up total revenue excluding interest expense by 30%.

Net income came in at $ 1.7 billion, or $ 2.18 per share, higher that analyst estimates of $ 1.87 per share, according to Refinitiv IBES data.

The profit growth was, however, held back by a 29% surge in expenses due to increased compensation and higher usage of travel-related benefit. The expense jump was in line with figures from other major financial institutions.