American Express Co. executives gave an optimistic outlook for the management change and new chapter the company will begin in 2018.
On the heels of the announcement that Vice Chairman Stephen Squeri will replace Chairman and CEO Kenneth Chenault when he retires Feb. 1, 2018, Squeri outlined his focus points to drive growth during the call to discuss third-quarter earnings. Squeri said some of the items on his agenda include a continued emphasis on small- and mid-sized business globally, expanding the company's digital partnerships and strengthening leadership in the premium consumer space.
CFO Jeffrey Campbell expressed confidence that the management change will not have any huge impact on the company's business, pointing out that Squeri has been "intimately involved in every change that we've made in particular over the last couple of years."
American Express again saw 8% adjusted revenue growth in the third quarter. Campbell said the company has had stronger financial performance than predicted so far in 2017 and expects net interest yield to plateau, which will somewhat slow growth. The CFO said during the company's second-quarter earnings call that the post-2017 target for revenue growth is 6%, but now he said he does not know when that plateau and downward pressure on growth will happen.
The executive also noted an uplift thus far in 2017 from the company's investments in both the business platinum and the consumer platinum card.
Campbell said American Express has made "solid progress" on its cost-reduction initiatives, but total operating expenses were flat compared to the prior-year period. Campbell said he remains confident that management can remove $1 billion from the company's gross cost base by the end of 2017. Given the company's cost-saving initiatives, he said selectively reinvesting in certain areas of the business will help drive future growth.
Campbell touted small- and medium-sized enterprises in the U.S. and internationally as well as the proprietary international consumer space as particularly good growth areas for the company.