US Stocks Alert | American Express (AXP.US) drops over 6% as Q2 spending growth outpaces revenue, potentially squeezing profit margins

Zhihui Finance APP has learned that on Friday, American Express (AXP.US) fell over 6% to close at $318.88. In terms of news, American Express’s second quarter financial report as of June 30 showed: total revenue (excluding interest expenses) was $19.637 billion, a year-on-year increase of 10%, slightly below the market expectation of $19.69 billion; net profit was $3.11 billion, up 8% year-on-year (compared to $2.885 billion in the same period last year); diluted earnings per share (EPS) was $4.53, an increase of 11% year-on-year, higher than analysts’ expectation of $4.40. The company’s total expenses increased by 12% year-on-year, outpacing the more than 10% revenue growth, mainly driven by rising customer engagement costs due to increasing cardmember spending, the upgrade of the U.S. Platinum Card, and a higher utilization rate of cardmember benefits, raising concerns in the market about margin pressure. Zacks analysts had previously warned that rising customer engagement costs related to increased cardmember spending and higher utilization of travel and lifestyle benefits could compress profit margins.