American Express chairman and CEO Stephen Squeri has been proven right for his cautious approach to rolling out cryptocurrency services on the payment giant's platform.
"What I've said from the beginning is that cryptocurrencies are really an asset class like gold or like silver. Look at Bitcoin – which is a good bellwether – it's down 50% in two months. How do you call it a currency?" Squeri told Yahoo Finance in an interview.
Squeri said at the Yahoo Finance All Markets Summit in October it would be a while before consumers would see a crypto-backed Amex card.
Crypto's recent plunge underscores Squeri's cautious viewpoint.
Bitcoin is trading at $36,858, down 23% year-to-date. The benchmark crypto has shed 46% from its Nov. 10 high of around $68,000. At one point this month, bitcoin was down more than 52% from those highs. Meanwhile, ethereum is down 37% on the year.
Added Squeri, "As I've said in the past, there's a place for them [cryptos], and the underlying technology we watch really, really carefully."
Amex's continued momentum in what it does best — credit cards —suggests it doesn't need to yet wade into the unknown waters that are crypto.
American Express saw top- and bottom-line growth within all its business segments as the global economy continued to improve from the pandemic. The results were paced by the Global Merchant Service segment. Sales rose 31% from a year ago to $1.5 billion. Pre-tax profits increased to $508 million from $276 million a year ago.
Meanwhile, profits at Amex's Global Commercial Services segment notched a profit of $776 million from $667 million last year. Profits in the Global Consumer Services segment clocked in at $1.3 billion, compared with $1.5 billion a year earlier.
For 2022, Amex sees sales rising 8% to 20% from the prior year. Earnings are pegged in a range of $9.25 to $9.65 per share. Analysts were looking for earnings of $9.67 per share. Longer term, Amex said it sees sales growth of 10% and mid-teens percentage earnings growth.
Squeri told Yahoo Finance the outlook for this year is strong, supported by momentum in attracting new card clients and spending by existing users.
Amex also lifted its dividend by 20%.
Its shares rose 8% in Tuesday's session.