Beating estimates for EPS, revenues
Consumer financial companies (XLF) such as American Express (or Amex) (AXP), Mastercard (MA), and Visa (V) beat analysts’ estimates for EPS (earnings per share) in 2Q17. Amex’s and Mastercard’s expected EPS for 2Q17 stood at $1.44 and $1.04, respectively. They beat those estimates by posting EPS of $1.47 and $1.10, respectively. Visa’s expected EPS for fiscal 3Q17 stood at $0.81, which the company managed to beat by posting EPS of $0.86. Discover Financial Services (DFS) missed the analyst estimate for EPS of $1.45 with EPS of $1.40 in 2Q17.
American Express reported net income of $1.3 billion in 2Q17, reflecting a fall of 33.0% on a YoY (year-over-year) basis. The fall was a result of discontinuing its partnership with Costco (COST).
In 2Q17, Mastercard reported net revenues of $3.1 billion, reflecting a rise of 14.0% from 2Q16 on a currency-neutral basis. The rise came mainly from switched transactions and cross-border volumes.
In fiscal 3Q17, Visa managed to report net operating revenues of $4.6 billion, which reflects a rise of 26.0% on a YoY basis. The rise was mainly due to the acquisition of Visa Europe and the increase in cross-border volumes. Increased processed transactions and payments volume were also major contributors to the growth of net operating revenues.
Discover Financial Services
Discover Financial Services (DFS) managed to post net income of $546.0 million in 2Q17, which reflects a fall of 11.0% from 2Q16. Discover also posted revenues of $2.4 billion in 2Q17, which reflects a rise of 9.0% from 2Q16. The company also saw an increase in its provision for loan losses, which stood at $640.0 million in 2Q17 compared to $412.0 million in 2Q16.