American Express drops more than 3 percent after missing on revenue

  • AmEx posted earnings that topped Wall Street expectations, but revenue fell short.
  • The payments company said its net income rose 21 percent year over year amid growth in member spending and fees.
  • The stock has risen 20 percent in the past 12 months and is just slightly below its all-time intraday high.

American Express tumbled after the company reported revenue that fell short of expectations on Wednesday.

The stock fell more than 3 percent in after-hours trade.

Here's how the company did compared with what Wall Street expected:

  • Earnings: $1.84 per share vs. $1.82 per share, forecast by Thomson Reuters
  • Revenue: $10.00 billion vs. $10.05 billion, forecast by Thomson Reuters

For the second quarter, AmEx's net income climbed to $1.62 billion, or $1.84 per share, from $1.34 billion, or $1.47 a share, a year earlier.

The company said its results benefited from "higher spending by consumer, small business, and corporate Card Members." AmEx said it also saw higher loan volumes and fee income.

The payments company reaffirmed its full-year profit outlook, saying it still expects earnings between $6.90 and $7.30 a share.

American Express said its provisions for losses were $806 million, up 38 percent from $583 million a year ago. The company said the figure was in line with its expectations. It also said that "growth in the loan and charge portfolios and higher write-off rates" contributed to that increase.

AmEx also said its expenses climbed 7 percent to $7.1 billion amid "higher rewards expenses and costs associated with marketing and business development." It said, however, that operating expenses declined 2 percent year over year.

In June, the Supreme Court ruled in favor of American Express in a credit card fee lawsuit. AmEx rules stopped merchants from offering customers discounts or incentives to use cards with lower "swipe" fees, like rivals Visa or Mastercard.

As of the market close, shares of American Express have climbed 20 percent in the past 12 months. The stock remains close to its all-time intraday high of $103.24, ending Wednesday's session at $102.98.