American Express Co. (AXP) shares rose 1% to $100.48 Friday after the credit card provider posted weaker-than-expected fourth-quarter profit despite a booming holiday period for U.S. consumer spending.
American Express said adjusted earnings for the three months ending in December came in at $1.74 per share, swinging from a loss in the same period last year but missing the Street consensus forecast of $1.80. Net revenues were also shy of analysts' estimates, rising 7.9% to $10.47 billion as 12 million new card users were added to its network over the whole of 2018 and earnings hit $7.33 per share.
"Here's what I would say and quarters drive me a little bit crazy, but you look at the whole year and with $7.33 from an earnings perspective and 10%, revenue was really steady for us," CEO Steve Squeri told investors on a conference call late Thursday. "I think what's really important as a management team, we're managing for the year. You have arbitrary cutoffs which happen to be quarters. But we're really trying to manage for the entire year."
"The reality is, is when we see good investment opportunities we will make those investment opportunities because they're good for our shareholders in the medium and long term," he added. "So we feel - as I said, we feel great about 2018 and we feel good about the momentum that we have going into 2019."
Traditional U.S. retailers have posted uniformly weak sales over this holiday period, despite a robust backdrop for the American consumer, who is seeing wages rise at the fastest pace in a decade and domestic unemployment levels last seen in the late 1960s.
U.S retail sales rose by a stronger-than-expected 0.9% in November, the Commerce Department said last month, after an upwardly revised 0.7% increase in October. The Department's reading for December has been delayed by the ongoing government shutdown.
Data from Adobe Analytics suggests 2018 online holiday spending topped a record $126 billion while Amex rival MasterCard MA reported a 5.1% rise in Christmas spending that took the overall tally to $850 billion .