American Express just reported first quarter earnings that missed on revenues.
The credit card company reported earnings per share of $US1.48 on revenue of $US7.95 billion.
Analysts were expecting EPS of $US1.37 on revenue of $US8.2 billion, according to Bloomberg.
The company blamed much of the its miss on earnings to strong dollar.
Net income came in at $US1.5 billion, up 6 per cent from $US1.4 billion a year ago. Diluted earnings per share rose 11 per cent to $US1.48, from $US1.33 a year ago.
“First quarter results showed solid core performance and continued progress in expanding the American Express franchise despite an impact from several of the headwinds we’re confronting,” said CEO Kenneth I. Chenault in the release.
Net income on US card services rose to $US934 million, up 7% from $US876 the previous year. Net income on international card services fell to $US134 million, down 16% from $US159 a year ago.
The stock is down 13% in what’s been a challenging year.
The big news was the loss of its exclusive co-branding deal with Costco, which didn’t make economic sense, according to Chenault. From next April, Visa will replace the company at Costco.American Express also lost a co-branding deal with JetBlue.
The company lost an antitrust lawsuit brought by the Department of Justice on whether it could tell merchants not promote other credit cards.
“As previously reported, we expect full year 2015 earnings will be flat to modestly down year-over-year with the headwinds we’re facing and as we ramp up investments to help offset the impact from ending our relationship with Costco in the U.S. next year,” Chenault said.