AXP Q2 Earnings Beat Estimates on Strong Card Member Spending Growth

The strong quarterly results were driven by increased Card Member spending, higher net interest income and improved card fee growth. However, the upside was partly offset by elevated operating expenses.

AXP’s Q2 Operational Performance

Network volumes grew 9% year over year in the second quarter to $516.8 billion on the back of higher U.S. consumer spending. But the metric missed the Zacks Consensus Estimate of $520.9 billion. Total interest income of $6.6 billion rose 5% year over year but missed the consensus mark of $6.7 billion. Provision for credit losses came in at $1.1 billion, which declined 23% year over year in the quarter under review due to a reserve release during the quarter compared to a reserve build in the prior-year quarter.

Total expenses increased 12% year over year to $14.5 billion due to higher variable customer engagement costs resulting from increased spending by Card Members, the refresh of the U.S. Platinum Card, greater use of Card Member benefits, and higher operating costs.

AXP’s Q2 Segmental Performances

The U.S. Consumer Services segment recorded pre-tax income of $2.1 billion, which grew 23% year over year and beat the Zacks Consensus Estimate by 27%. Total revenues, net of interest expenses, improved 11% year over year to $9.5 billion but marginally missed the Zacks Consensus Estimate. An expanding Gen-Z and Millennials’ customer base favored this segment’s results.

The Commercial Services segment’s pre-tax income of $970 million rose 7% year over year in the second quarter but fell short of the Zacks Consensus Estimate of $972.8 million. Total revenues, net of interest expense, grew 7% year over year to $4.5 billion, and beat the consensus mark of $4.4 billion.

The International Card Services segment posted pre-tax income of $477 million, which rose 3% year over year but missed the Zacks Consensus Estimate of $908.8 million. Total revenues, net of interest expense, climbed 12% year over year to $3.6 billion but missed the consensus mark of $3.9 billion.

The Global Merchant and Network Services segment’s pre-tax net income of $1.1 billion advanced 7% year over year in the quarter under review but missed the Zacks Consensus Estimate of $1.2 billion. Total revenues, net of interest expense, improved 8% year over year to $2.1 billion but came in lower than the consensus mark by 1.2%.

Corporate and Other incurred a pre-tax loss of $569 million in the second quarter, wider than the prior-year quarter’s loss of $550 million.

Balance Sheet (As of June 30, 2026)

American Express exited the second quarter with cash & cash equivalents of $45.2 billion, which fell 5.3% from the 2025-end level. Total assets of $308.2 billion increased 2.7% from the figure at the end of 2025.

Long-term debt amounted to $57 billion, up 1.1% from the figure as of Dec. 31, 2025.  Short-term borrowing was $2 billion.

Shareholders’ equity of $34.3 billion rose 2.4% from the 2025-end level. Return on average common equity remained flat year over year at 37.8% in the quarter under review.

Capital Deployment Update

American Express bought back 7 million common shares in the second quarter of 2026 for $2.2 billion and paid $600 million worth of dividends. In the quarter under review, the company paid a per-share dividend of 95 cents.

AXP’s 2026 Outlook

American Express now expects 2026 revenues to increase to 10% from the 2025 level. Management continues to estimate EPS in the range of $17.30-$17.90, the midpoint of which indicates an improvement of 14.4% from the 2025 figure.

AXP’s Zacks Rank & Key Picks

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

Some better-ranked stocks in the broader finance space are Victory Capital Holdings, Inc. VCTR, Acadian Asset Management Inc. AAMI and Newmark Group, Inc. NMRK, 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 Victory Capital’s current-quarter earnings of $1.81 per share has witnessed five upward revisions in the past 30 days against none in the opposite direction. VCTR’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 6.9%. The consensus estimate for current-quarter revenues is pegged at $386 million, suggesting a 9.9% year-over-year jump.

The consensus estimate for Acadian Asset Management’s current-quarter earnings is pegged at $1.05 per share, which signals 64.1% year-over-year growth. Its earnings beat estimates in three of the trailing four quarters and missed once, with the average surprise being 8.6%. The consensus mark for AAMI’s current-quarter revenues of $179.4 million implies 43.7% year-over-year growth.

The consensus estimate for Newmark Group’s current-quarter earnings is pegged at 39 cents per share, which has witnessed one upward revision in the past seven days against none in the opposite direction. Its earnings beat estimates in each of the trailing four quarters, with the average surprise being 12.1%. The consensus estimate for NMRK’s current-quarter revenues is pegged at $881 million, which implies a 16.1% year-over-year rise.

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