American Express Co. (AXP:US), the biggest credit-card issuer by purchases, rose the most in more than two years after reporting fourth-quarter profit doubled and Sanford C. Bernstein & Co. raised profit estimates.
AmEx climbed 5.5 percent to $92.58 at 10:26 a.m. in New York, the most intraday since November 2011 and the best performer in the 30-company Dow Jones Industrial Average, which rose less than 1 percent. AmEx was the second-best performer in the Dow last year, gaining 58 percent.
Fourth-quarter net income advanced to $1.3 billion, or $1.21 a share, from $637 million, or 56 cents, a year earlier, the New York-based firm said yesterday in a statement. Worldwide card spending increased to $254 billion as revenue climbed 5 percent, the firm said. The lender is benefiting from a pickup in household wealth and consumer confidence that has propelled card purchases.
“AmEx continues to deliver solid billed business, operating leverage and strong credit metrics,” Bernstein’s John McDonald wrote in a research note today. The firm raised its earnings-per-share estimate for 2014 by 10 cents to $5.40 and its 2015 estimate by 15 cents to $6.
Capital One Financial Corp. (COF:US), the McLean, Virginia-based credit-card lender, declined 4 percent, the biggest intraday drop in a year, after reporting fourth-quarter profit missed some estimates and amid higher expenses.
“Loan growth and NIM remain constrained and revenue guidance was reduced, so share buybacks and expense management remain key to achieving estimates,” Jason Arnold, an analyst with RBC Capital Markets, said today in a note. NIM, or net interest margin, is the difference between what a bank pays for deposits and charges for loans.
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