American Express Company (NYSE:AXP) stock rallied more than 10% after the integrated payments company reported record revenues for 2022 and forecast more of the same for 2023 as more customers use its cards.
The New York-based company recorded fourth-quarter revenues net of interest expenses of $14.2 billion, a 17% improvement on the $12.1 billion reported a year earlier. That took the annual total to $52.9 billion.
“We ended 2022 with record revenues, which grew 25% from a year earlier, and earnings per share of $9.85, both well above the guidance that we provided when we introduced our long-term growth plan at the start of last year, despite a mixed economic environment,” American Express chairman and CEO Stephen Squeri said in a statement.
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Squeri attributed the revenue growth to investment in its value propositions, increasing its generational relevance and growing merchant acceptance. It also introduced new digital capabilities and enhanced its membership model with new lifestyle offerings and financial services, he said.
“This has led to sustained growth in customer acquisitions – which reached a record 12.5 million new card accounts in 2022 – along with high levels of engagement and retention, which has enabled us to build scale while driving momentum across our core businesses,” Squeri added. “Our credit metrics remain strong, supported by our premium customer base, exceptional risk management capabilities and the thoughtful actions we have taken throughout the year.”
Given the business’s momentum, it guided for 2023 revenue growth of 15% to 17% and earnings per share of $11 to $11.40, saying it is well positioned to deliver on its longer-term growth plan aspirations for double-digit annual revenue growth and mid-teens EPS growth.
It also plans to increase its regular quarterly dividend by 15%, from $0.52 to $0.60 per share, beginning with the first quarter 2023 dividend declaration.
Its shares were 10.4% higher at $172 in mid-morning New York trade.
Contact the author at stephen.gunnion@proactiveinvestors.com