American Express CEO explains Q4 revenue miss

Yahoo Finance Executive Editor Brian Sozzi spoke with American Express CEO Stephen Squeri (AXP) about their recent earnings report, revenue forecasts, and consumer habits. The company missed out on revenue expectations, posting $15.8 billion versus an expected $15.99 billion. Sozzi explains that Squeri points to the devaluations of the Argentine peso as part of the reason for this miss.

Brian Sozzi joins the Live show to break down his conversation with Squeri as well as take a deep dive into the financial services company's quarterly earnings.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

BRIAN SOZZI: It was interesting quarter because on the surface, guys, the Amex came out here. And they missed earnings estimates. And I asked Steve right out of the gate here, why did you miss these earnings estimates? And he pointed to the devaluation of the Argentine peso that occurred in December. And this is something we heard this week from the likes of Puma and other companies. That is starting to impact results for a lot of multinational companies.

And if you're an investor out there, and you're invested in companies that are globally oriented, it's something you want to keep in mind. And nonetheless, I think the Street is really focused in on this company's outlook for this year, well ahead of consensus by more than $0.20 in terms of earnings guidance range.

Steve, he told me that the business is doing well. I think he would call it resilient. And he's expecting these trends to largely continue. One thing I would watch too, guys, they're expecting 40 product refreshes this year. That is more updates to what they're offering to consumers this year versus last year. So something to watch, perhaps, setting the table for a higher price or raising the prices again for the Amex card. Now, Steve didn't tell me that, but just me reading some tea leaves.

BRAD SMITH: What can we extrapolate about the consumer from these earnings? And what did he have to say about that?

BRIAN SOZZI: Yeah. Steve said, the-- he acknowledged that the economy was slowing. So that was Steve's exact quote here that the economy was slowing. But he expects the company can do good really in any environment. And I think that shows in terms of how much optimism he has laid out in terms of guidance. Now, compared to what we heard-- what we just heard from Amex today from, what we heard from Visa yesterday, Visa called out something very important. Sales each quarter-- consumer spending was soft or mixed each month of the quarter and weak in January, in large part, because of weather. I think that is more a reflection of visa being more value-oriented in terms of customer focus. And Amex being more tied to high-end shoppers, who are still enjoying probably a lot of gains on their NVIDIA shares.

BRAD SMITH: A lot of. LVMH too.

BRIAN SOZZI: LVMH.

SEANA SMITH: Yeah, exactly. That was actually another astonishing report here, when we talk about the resilient consumer. The fact that people are still out there spending. We've been talking about time and time again that we are waiting or anticipating for this deterioration in the consumer. And it's just not happening.

BRIAN SOZZI: So it's showing up a little bit. So in the Amex results-- I don't want to be all pollyannaish here-- they're credit card write offs or the credit loss provisions, 1.44 billion. That was up 40% year-over-year. So there are consumers out there saying, I just bought too much stuff, man. And I have to write this off. And I get you can't pay this bill at the end of the month.

So there is some stress. But, by and large, to your point, Seana, rates are much higher year-over-year. And yet, consumers are still out there buying probably a lot of junk, they don't need.

SEANA SMITH: Yeah. Well, certainly, the better way that I should have put it is much better than expected, it seems like time and time again. Yes, we are seeing some deterioration. But still--

BRIAN SOZZI: How do you like a new Mercedes you put on the Amex card?

SEANA SMITH: I wish. I wish. One day. One day. All right. Sozzi, thanks.