Shares of American Express dipped Friday after the credit card company posted a first-quarter earnings beat and reaffirmed its guidance for 2022 amid a challenging macroeconomic environment.
American Express (ticker: AXP) posted earnings of $2.73 a share on $11.7 billion in revenue, up 29% from the same period last year. Analysts polled by FactSet were expecting earnings of $2.40 a share on $11.62 billion in revenue.
The company reaffirmed its full-year guidance of 18% to 20% revenue growth and earnings per share of between $9.25 and $9.65. Analysts are predicting earnings of $9.71 per share for the fiscal year.
First-quarter revenue growth was driven by card member spending growth of 35% globally adjusted for foreign exchange rates, with volumes reaching a monthly record high in March, said CEO Stephen Squeri in a press release.
"This performance was enabled by our ongoing investments in areas critical to sustainable, long-term growth, including customer acquisition, engagement and retention," he added.
Goods and services spending grew 21% year over year, but the biggest spike in spending came from the company's travel segment. Travel and entertainment spending was up 121%, reaching pre-pandemic levels for the first time in March, Squali said. AmEx also had record monthly acquisitions for its Delta Air Lines (DAL) credit cards in March, he said.
While AmEx's travel rewards have always been one of the company's strongest tools to attract customers, they are also one of its largest expenses. Consolidated expenses grew 34% from a year ago, the company said, reflecting higher customer engagement costs, as well as increased compensation costs and equity investments.
AmEx stock was down 0.9% to $184.12 in premarket trading on Friday. The stock has gained 13.5% year to date.