Amex reveals its position during coronavirus outbreak

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Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely… Read more
  • The firm announced that its forex-adjusted revenue growth for Q1 of this year would be between 2% and 4% and that its adjusted earnings per share would be close to $2
  • The change comes after the firm had a strong start to the year, but quickly saw its prospects damaged by the arrival of the coronavirus outbreak
  • “The global pandemic has rocked the payments players with some having also lowered their guidance reeling under its severity”, said a research firm

Global credit card provider and financial services firm American Express has shone a light on how it is performing in the age of the coronavirus crisis.

American Express (Amex) is one of the world’s most famous providers of credit card services and is hence highly exposed to the global cross border payments market.

It has recently revealed the precise nature of the impact of the crisis on its financial outlook as part of a release to investors.

It began Q1 of 2020 in a good position and managed to enjoy strong spells across all of January and also into February.

However, by the end of that month – and as of March, the key moment for the coronavirus spread in Europe and North America, got underway –this began to change.

Its revenue growth for the period, when adjusted for foreign exchange rates, is now expected to be in the range of 2% to 4%.

In terms of shareholdings, adjusted earnings per share for the firm – which is often culturally associated with higher-earning customers – are now expected to sit somewhere in between $1.90 to $2.10 per share.

This is without factoring in reserve builds for the quarter.

Analysing the new developments, equity research firm Zacks described the effects that the coronavirus crisis was having on the cross border payments industry – especially in relation to travel bans.

“The payments industry has not been spared from the deadly coronavirus or COVID-19 effect. The rampant coronavirus spread has had a serious impact on the global stock market and is not fading away anytime soon”, it argued.

“This coronavirus outbreak has caused [a] bigger problem in the global economy due to demand contraction led by travel restrictions as well as supply disruptions”, it added.

While its particular focus in this release was on American Express, Zacks went on to explain that other firms in the sector were also likely to be hit hard at some stage.

“The global pandemic has rocked the payments players with some having also lowered their guidance reeling under its severity”, it said.

“The coronavirus fear has hit the consumer spending hard due to lower travel frequency.”

“Almost all the top players in the industry are bearing the brunt of coronavirus-induced business loss”, it claims.

As is the case with many industries, the international money transfer sector is facing problems and challenges in the face of the coronavirus crisis.

Keep up to date with the latest twists and turns in the sector here.


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