Card-billed business for American Express Global Commercial
Services, the division that houses corporate cards, increased 11 percent year
over year in the fourth quarter to $116.6 billion. Full-year GCS card-billed
business increased 7 percent year over year to $438.1 billion. Cards in force
increased 3 percent to 14 million.
Fourth-quarter GCS net income increased 52 percent year over
year to $580 million, reflecting higher cardholder spending, according to Amex.
Full year net income totaled $2 billion, a six percent year-over-year increase.
Amex GCS expenses decreased 7 percent to $1.7 billion, owing
to lower marketing expenses. However, those savings were partially offset by
higher rewards expenses, which owed to the increase in cardholder spending, according
to Amex.
GCS represented 40 percent of Amex's total billing volume in
the fourth quarter. GCS's international SME segment, which represented 5 percent
of Amex's total billings, again experienced the highest year-over-year growth rate:
20 percent on a foreign exchange-adjusted basis. GCS's U.S. SME segment grew 9
percent, and GCS's large and global corporate segment grew 6 percent.
"SME represents one of our highest growth areas, and
you see that again this quarter," Amex CFO Jeff Campbell said during an
earnings call. "We also saw some sequential improvement in the overall
T&E billings growth rate this quarter."
Across its full portfolio, Amex reported a $1.2 million net
income loss for the fourth quarter, compared with $825 million for the fourth
quarter of 2016. Amex attributed the loss to the estimated $2.6 billion it paid
in taxes for certain overseas earnings and the recalculation of U.S. deferred
tax assets and liabilities associated with the U.S. Tax Act and Jobs Act that
President Donald Trump signed in December. However, for 2018, Amex expects to
benefit from a lower corporate tax rate.
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Amex GCS Q3 earnings