Benzinga | Apr 22, 2021 10:21AM EDT

Earnings Preview for American Express

On Friday, April 23, American Express (NYSE:AXP) will release its latest earnings report. Decipher the announcement with Benzinga's help.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

American Express EPS is expected to be around $1.61, according to sell-side analysts. Sales will likely be near $9.17 billion. American Express EPS in the same period a year ago totaled $1.98. Sales were $10.31 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Friday, earnings would be down 18.69%. Sales would be down 11.06% from the year-ago period. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 1.31 1.33 -0.11 1.43EPS Actual 1.76 1.30 0.29 1.98Revenue Estimate 9.35 B 8.66 B 8.15 B 10.65 BRevenue Actual 9.35 B 8.75 B 7.67 B 10.31 B

Stock Performance

Shares of American Express were trading at $147.22 as of April 21. Over the last 52-week period, shares are up 76.12%. Given that these returns are generally positive, long-term shareholders are probably content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. American Express is scheduled to hold the call at 08:30:00 ET and can be accessed here.