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American Express has revealed that the deadly coronavirus (Covid-19) outbreak has affected spending volumes, which it believes could impact its Q1 2020 earnings.
The firm said that the performance in January and February 2020 displayed strong momentum in line with the previous year.
However, it has flagged softness in spending volumes at the end of last month. This sentiment prevailed in March and spread worldwide.
As a result, the firm predicted that its Q1 revenue growth will be between 2% and 4% on an FX-adjusted basis.
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By GlobalDataIt now expects adjusted earnings per share between $1.90 and $2.10, excluding quarterly reserve builds.
Citing IBES data from Refinitiv, Reuters said that the figures are lower than analysts’ average estimate of approximately 8% revenue growth and $2.17 per share profit.
American Express also said that it is currently unable to predict its performance beyond Q1 on account of the uncertainty related to the outbreak’s duration and reach.
With the forecast, the firm follows in the footsteps of other card giants Mastercard and Visa who have lowered revenue outlook due to Covid-19.
American Express chairman and CEO Stephen Squeri said: “American Express has a long runway to deliver strong, long-term performance, driven by our differentiated business model and our focus on our strategic imperatives.
“We have a long track record of navigating through uncertain economic periods by focusing on our disciplined operational and strategic execution, our dedicated colleagues, and the deep relationships we have with our customers and partners. We will continue our strategy of investing in share, scale and relevance, and we are focused on running the company for the long term.”
The Covid-19 pandemic has resulted in the deaths of over 7,100 across the globe so far. The total number of confirmed cases has exceeded 182,000.
