Consumers are increasingly in good shape and willing to put their shopping splurges on some plastic, according to American Express (AXP) Chairman and CEO Stephen Squeri.
"We acquired 2.4 million cards and so sequentially, we continue to acquire more and more cards and those cards tend to be more fee-based cards," Squeri tells Yahoo Finance in a phone interview moments after the company reported second quarter earnings on Friday. "We've got almost 66% of the cards we acquired this quarter were fee-based cards, and 57% of those cards were millennial cards as well — so that we feel really good about that. Our current member retention is really at all-time highs, and we're retaining more card members than we've ever had."
American Express saw top- and bottom-line growth within all its business segments as the global economy continued to claw back from the COVID-19 pandemic. The results were paced by the company's largest segment, Global Consumer Services. Sales rose 28% from a year ago to $6 billion. Pre-tax profits increased to $1.9 billion from $843 million a year ago.
Meanwhile, profits at Amex's Global Commercial Services segment swung to a profit of $839 million from a loss of $22 million last year. Profits in the Global Merchant and Network Services segment clocked in at $527 million, compared with $188 million a year earlier.
Here is how American Express performed compared to Wall Street estimates:
Net Sales: $10.24 billion vs. $9.64 billion
Diluted EPS: $2.80 vs. 1.62
American Express shares rose 3% in early trading on Friday. Shares of Amex have surged 77% over the past year, outperforming the Dow Jones Industrial Average's 28% advance.
Squeri tells Yahoo Finance earnings for 2022 could approach $9.25 a share. Analysts currently estimate $9.19 a share.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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