New York’s AmEx forecasts consumer travel recovery in summer, profit beats estimate
by SOURAV D | VIEW 6156
On Tuesday, American Express Co, the New York-based multinational financial services and credit card provider had laid out a dour quarterly earnings’ report for fiscal fourth quarter of the year that ended on December 31, nonetheless, the 170-year old financial services provider had forecasted an upsurge in holiday travel this summer as the company looked to an overall rebound in profit and revenues following a year that had horrendously hurt its turnovers from airline traffic and hotel bookings. Nonetheless, despite a grievously hurt leisure and entertainment sector amid wide-spread lockdown measures across the globe, the New York-based credit card issuer had surprisingly beaten Wall Street forecasts for profit as the company had downsized credit loss reserves and profited from a ballooning online spending since pandemic-wary consumers across the world turned to online over the holiday quarter last year.
American Express Co beats Wall Street estimates for profit
In tandem, although the New York-headquartered credit card provider had forecasted an upbeat outlook about holiday travel this summer as a rollout of vaccination campaign in a majority of G20 nations would likely to kickstart travel-related spending among tens of thousands of consumers who had been stuck at their home more than a year, American Express Co had warned that a recovery in corporate travel spending would take much longer.
However, American Express Co’s travel and entertainment-related spending declined as much as 65 per cent over Q4, 2020. Besides, according to AmEx’s quarterly earnings’ report for Q4, 2020, the company’s net profit beat estimate and stood at $1.76 per share, above an analysts’ estimate of $1.31 per share.
Meanwhile, adding that the company was expecting an overall rebound in revenues by 9% to 10% in 2021, AmEx Chief Executive Stephen Squeri said in a post-earnings’ conference call with the reporters, “...As we get into this summer season, this June, July, August and September, you will see a rush for people to travel, especially air travel.” Nonetheless, American Express does not expect a full-fledged recovery until at least 2022.