AXP Q4 Earnings Lag Estimates on Rising Customer Engagement Costs

American Express Company AXP reported fourth-quarter 2025 earnings per share (EPS) of $3.53, which missed the Zacks Consensus Estimate by 0.3%. However, the bottom line climbed 16% year over year.

Total revenues, net of interest expense, amounted to $19 billion, which beat the Zacks Consensus Estimate by 0.8%. The top line improved 10% year over year in the quarter under review.

The quarterly earnings suffered a blow due to elevated customer engagement and operating cost levels. Nevertheless, the downside was partly offset by rising Card Member spending. Rising revolving loan balances and continued strong card fee growth aided its performance.

American Express Company Price, Consensus and EPS Surprise

American Express Company price-consensus-eps-surprise-chart | American Express Company Quote

AXP’s Q4 Operational Performance

Network volumes of $506.2 billion rose 9% year over year in the fourth quarter, driven by higher U.S. consumer spending. The figure beat the Zacks Consensus Estimate by 0.7%. Total interest income of $6.6 billion increased 8% year over year but missed the consensus mark by 0.9%. Provision for credit losses rose 9% year over year to $1.4 billion due to increased net write-offs.

Total expenses increased 10% year over year to $14.5 billion due to higher operating expenses and an elevated customer engagement cost level, which resulted from expanding Card Member spending and the U.S. Platinum Card refresh.

AXP’s Q4 Segmental Performances

The U.S. Consumer Services segment’s pre-tax income of $1.6 billion improved 0.3% year over year in the fourth quarter but missed the Zacks Consensus Estimate by 5.3%. Total revenues, net of interest expenses, climbed 11% year over year to $9.2 billion. Growth in the customer base of Gen-Z and Millennials also favored this segment’s results.

The Commercial Services segment recorded a pre-tax income of $837 million in the quarter under review, which increased 3% year over year from the prior-year figure and surpassed the Zacks Consensus Estimate of $758.1 million. Total revenues, net of interest expense, amounted to $4.4 billion, which grew 7% year over year, driven by an increase in net interest income. The reported figure beat the consensus mark by 3.3%.

The International Card Services segment reported a pre-tax income of $316 million in the fourth quarter, which rose from the year-ago figure of $34 million and beat the consensus mark of $274.9 million. Total revenues, net of interest expense, improved 17% year over year to $3.5 billion and beat the consensus mark of $3.4 billion.

The Global Merchant and Network Services segment’s pre-tax net income of $884 million increased 4% year over year in the quarter under review but missed the Zacks Consensus Estimate of $1.1 billion. Total revenues, net of interest expense, rose 8% year over year to $2 billion.

Corporate and Other incurred a pre-tax loss of $497 million in the fourth quarter, wider than the prior-year quarter’s loss of $490 million.

Balance Sheet (As of Dec. 31, 2025)

American Express exited the fourth quarter with cash & cash equivalents of $47.8 billion, up from $40.6 billion at 2024-end. Total assets of $300.1 billion rose from $271.5 billion at 2024-end.

Long-term debt amounted to $56.4 billion, up from $49.7 billion at 2024-end. Short-term borrowing was $1.4 billion.

Shareholders’ equity of $33.5 billion improved from $30.3 billion at the end of 2024. Return on average common equity was at 35.3%, below the year-ago level of 36.1%.

Capital Deployment Update

American Express bought back 2 million common shares in the fourth quarter of 2025. In the quarter under review, the company paid a per-share dividend of 82 cents.

AXP’s 2026 Outlook

American Express projects revenues to increase between 9% and 10% in 2026 from the 2025 level of $72.2 billion. Management expects EPS in the range of $17.30-$17.90, the midpoint of which indicates an improvement of 14.4% from the 2025 level of $15.38.

AXP’s Zacks Rank & Key Picks

AXP currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader finance space are Cboe Global Markets, Inc. CBOE, Skyward Specialty Insurance Group, Inc. SKWD and Trupanion, Inc. TRUP, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Cboe Global Markets’ current-year earnings of $10.51 per share has witnessed one upward revision in the past seven days against none in the opposite direction. Cboe Global Markets beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 2.9%. The consensus estimate for current-year revenues is pegged at $2.4 billion, implying 15.4% year-over-year growth.

The Zacks Consensus Estimate for Skyward Specialty Insurance Group’s current-year earnings of $3.74 per share has witnessed one upward revision in the past 30 days, against no movement in the opposite direction. Skyward Specialty Insurance Group beat earnings estimates in each of the trailing four quarters, with the average surprise being 11.6%. The consensus estimate for current-year revenues is pegged at $1.4 billion, indicating 21.5% year-over-year growth.

The Zacks Consensus Estimate for Trupanion’s current-year earnings is pegged at 48 cents per share, implying 308.7% year-over-year growth. In the past 30 days, Trupanion has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $1.4 billion, suggesting 11.9% year-over-year growth.

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