American Express CEO remains bullish on earnings beat

Yahoo Finance's Brian Sozzi breaks down American Express earnings and CEO Stephen Squeri's tone in the earnings call.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: Welcome back on this Friday morning. Let's dive back into earnings. Starting with American Express, you're seeing the stock they are down close to 2% in the premarket. It was down, Brad, about 4% initially after the results.

And I caught up with a very, very fired up CEO in Stephen Squeri over American Express. He's always fired up but he had an extra level of fire on our call this morning. He's like, I don't know what the Street wants from us, essentially.

We came out here, we beat on sales. Their guidance-- they now see them hitting the high end or above the high end of their earnings outlook. The Street looked to initially react to them not taking up that full-year earnings raise for the year. But he tells you, Brian, look, we're gonna have a very strong holiday season. We're seeing nothing in our business right now that would suggest a recession. And we're full-- we're locked and loaded on 2023, trying to drive even better results.

So look, I'm not surprised the stock has come back here a little bit off of that worst of the session. There you see Squeri's quote right there to me earlier this morning. But they are getting the playbook out for a recession but they're not using it. They're not barring people. They're still hiring people. Momentum is there. So I would not be surprised if you see the Street come out here, various analysts to cover Amex, and try to defend the stock.

BRAD SMITH: I've been kind of fascinated with the read through that we've received from some very separate industry CEOs, and as it relates to something interesting here with travel. American Express-- a lot of people use their American Express cards when they are traveling or to book travel, just putting it on the credit card.

They said, the demand for travel here has exceeded their expectations throughout the year. Spending on T&E, they're increasing 57% from a year earlier. And then some of the T&E spending volumes, Travel and Expense spending volumes in international markets surpassing prepandemic levels.

You combine that with what we heard from the CEO of Verizon as well. Roaming rates up. AT&T said the same thing. People are clearly traveling. And I'm sorry that I'm drawing all of these parallels and pulling it back to travel.

BRIAN SOZZI: No, it's impressive I love it.

BRAD SMITH: But I think it is a read through, one of those common threads at least that in multiple industries is showing something to us about the consumer at least near-term. And the shift from goods to services spending that continues.

BRIAN SOZZI: Well here's a little nugget, too. I asked, Steve, what part of your businesses are growing the fastest? He says goods and services.

[LAUGHTER]

Goods up 16%, travel and entertainment up 57%. So for American Express, good quarter.