American Express reported a surprise quarterly profit on Friday but the coronavirus crisis continued to weigh on its transaction volumes, particularly in the crucial travel and entertainment sector.

For the second quarter, AmEx’s net income fell 85% to $257 million, or 29 cents per share, beating analysts’ estimates of a per-share loss of 8 cents.

But total revenue dropped 29% to $7.68 billion, missing the Wall Street consensus of $8.07 billion, as consumers and businesses cut their spending on travel and entertainment by 87% in the second quarter, with overall spending down by more than a third.

The credit card giant also set aside $1.6 billion, up from $861 million a year earlier, to cover possible card holder delinquencies.

“While our second quarter results reflect the challenges of the current environment, we remain confident that our strategy for navigating this period of uncertainty is the right one,” CEO Stephen Squeri said in a news release.

“Spending volumes, which declined to their lowest point this quarter in April, gradually improved in May and June, with small businesses being the most resilient,” he noted.

As Reuters reports, AmEx’s “high exposure to the travel and entertainment (T&E) industries, which have been ravaged by the COVID-19 pandemic, has led to a sharp decline in its overall spending volumes.”

“[AmEx is] in a tricky situation because they have a large corporate book and a big T&E book and those are the parts in the world’s economies that are weak, and consequently they are growing slower,” Susquehanna Financial Group analyst James Friedman said.

According to AmEx CFO Jeffrey Campbell, T&E spending was still down 75% during the first part of July but billing in other sectors is up 5%, particularly “in our commercial business, as our spending from small and midsize business customers has held up much better during this period than our larger corporate clients.”

“The majority of our spend from our small-business clients is B2B spending, while the spend from our large corporate global clients is T&E historically,” he added.

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