American Express Company

New York Stock Exchange
Back to all articles
Bullish +75

Amex says Iran war has an impact, but not a big one - American Banker

📉 Amex reported Q1 net income of $3.0 billion, beating analyst expectations despite broader geopolitical concerns.

🤖 Revenue reached $18.9 billion, a significant increase from the prior year's $16.9 billion.

📈 Earnings per share came in at $4.28, up from $3.64 last year, surpassing consensus estimates of $4.01.

✈️ Travel refunds spiked in March due to war-related cancellations, but Amex successfully rebooked 18,000 customers.

💰 Fuel costs remain under 2% of travel revenue and have not caused major financial discontinuities for the company.

🛡️ Management states that geopolitical risks are muted compared to supply chain concerns faced by other payment companies.

👥 CEO Steve Squeri highlights that focusing on younger, tech-savvy consumers provides a buffer against global instability.

💳 Amex reaffirmed full-year 2026 guidance for 9% to 10% revenue growth and EPS between $17.30 and $17.90.

📜 Consolidated credit loss provisions increased slightly to $1.3 billion due to higher net write-offs in the quarter.

🤖 The company is investing heavily in agentic AI, including new business cards like Graphite Business Cash.

🛡️ New developer kits and protocols allow Amex to verify AI agents and protect consumers from unauthorized transactions.

💻 Amex introduced tools for corporate customers to generate spending insights and manage employee expenses autonomously.

🤝 Partnerships with the NBA, NFL, and a $300 ChatGPT credit aim to strengthen loyalty among business users.

📊 Acquisition of Center in 2025 and expansion into B2B payments signal a strategic shift away from just corporate wealth.

👶 Millennials and Gen Z are cited as key growth segments with lower servicing costs and higher engagement.

Bullish Signals
  • Amex reported record billings in March, demonstrating strong demand despite global geopolitical uncertainty.
  • The company saw great engagement from its Platinum card refresh, highlighting customer loyalty and product strength.
  • Net income increased to $3.0 billion from $2.6 billion a year ago, while revenue grew to $18.9 billion from $16.9 billion the prior year.
  • Earnings per share rose to $4.28, up from $3.64 in the previous year, showing improving profitability.
  • Amex reaffirmed full-year 2026 guidance for 9% to 10% revenue growth and EPS between $17.30 and $17.90, signaling management confidence.
  • The net write-off rate decreased to 2.0 percent from 2.1 percent a year ago, indicating improved credit quality.
  • Analysts at Jefferies described the quarter's performance as 'a strong start' with incremental investments expected to support continued growth.
  • Amex is focusing on attracting younger consumers, with Millennials and Gen Z representing its fastest-growing customer segments and providing a long-term tailwind.
  • These younger cohorts are more engaged, use more rewards, and give American Express a higher share of wallet while incurring lower servicing costs.
  • Amex has invested heavily in agentic AI technologies, including the Graphite Business Cash card and ACE developer kit to drive new financial services.
  • Management highlighted improvements in technology work efficiency due to AI adoption, accelerating new tech project delivery.
  • Amex extended partnerships with major brands like the NBA and NFL while launching business-focused products and investing in agentic commerce.
  • The company offers a $300 ChatGPT business credit for U.S. business platinum and gold cards, providing a tangible value boost to premium members.
Risk Factors
  • Amex reported a spike in customer refunds in March due to cancelled travel in the Middle East, signaling immediate downside pressure from geopolitical instability.
  • Consolidated provisions for credit losses increased to $1.3 billion compared with $1.2 billion a year ago, reflecting higher net write-offs that could pressure future earnings.
Full Analysis
Amex executives indicated that while the ongoing conflict in Iran has captured their attention, its impact on operations remains muted. During a Thursday earnings call, American Express CEO Steve Squeri reported record billings and strong engagement from Platinum card refinances despite global instability. Although there was a noticeable spike in customer refunds in March due to travel cancellations in the Middle East, the company successfully rebooked approximately 18,000 customers with disrupted plans. Amex noted that fuel prices account for less than 2% of its billed travel-related business and observed no significant discontinuity from rising fuel costs, contrasting concerns from other financial institutions regarding potential supply chain disruptions and inflationary pressures. Financially, the company delivered robust results for the quarter ending March 31, posting net income of $3.0 billion compared to $2.6 billion in the prior year. Revenue reached $18.9 billion, an increase from $16.9 billion a year ago, while earnings per share rose to $4.28 from $3.64. Consolidated provisions for credit losses totaled $1.3 billion, reflecting higher net write-offs and a lower reserve release relative to the previous year; the first quarter net write-off rate was 2.0 percent versus 2.1 percent the prior year. These figures outperformed analyst expectations from Zacks Investment Research, which projected quarterly earnings of $4.01 and revenue of $18.62 billion. Amex reaffirmed its full-year 2026 guidance for revenue growth between 9% and 10%, with expected EPS ranging from $17.30 to $17.90, committing to increased spending on marketing and technology. Beyond traditional metrics, American Express is pivoting toward artificial intelligence to secure future growth and address geopolitical risks. Squeri highlighted that younger consumers, particularly Millennials and Gen Z, are better equipped to adapt to changing global dynamics and represent the fastest-growing customer segments with higher engagement and lower servicing costs. To leverage this trend, Amex has introduced several AI-driven products, including a Graphite Business Cash card utilizing agentic AI for product discovery and checkout, and the American Express Agentic Commerce Experiences developer kit designed to verify AI agents and ensure authorized transactions. The company also announced a $300 ChatGPT business credit for eligible Platinum and Gold cardholders and an Insights Agent for corporate customers to analyze spending data across accounts payable and expenses. These technological initiatives align with broader B2B payment expansions following the acquisition of Center in 2025, aiming to integrate AI agents that can autonomously manage tasks from travel booking to inventory replenishment while maintaining robust fraud protection through its closed-loop model.