American Express (AXP.US) Q3 Profit Exceeds Expectations and Raises Full-Year Results Forecast

The Zhitong Finance App learned that American Express (AXP.US) announced in its earnings report released on Friday that its third-quarter profit exceeded Wall Street's expectations. This was mainly due to the company's strict fee management, which effectively mitigated the impact of falling merchant fees. According to financial data, American Express's third-quarter revenue increased 8% to reach US$16.64 billion, although slightly lower than the forecast of US$16.67 billion. However, net profit rose slightly by 2% to reach US$2.51 billion, exceeding analysts' expectations. American Express earned $3.49 per share in Q3, higher than analysts' previous forecast of $3.28. This result reflects consumers' continued preference for credit cards with great rewards, which prompted the company to raise its performance expectations for the full year. American Express now expects earnings per share of between $13.75 and $14.05 in 2024, higher than the previous forecast of $13.30 to $13.80.

American Express CEO Steve Squerry said in an interview: “We have been recording revenue records for ten consecutive quarters. This quarter has been excellent. We not only surpassed our own expectations, but also raised market expectations. We are optimistic about the fourth quarter's performance.”

Although American consumers' purchasing power remains strong, rising interest rates and economic uncertainty may have an impact on purchases of non-essential goods. According to data from the London Stock Exchange, American Express's discount revenue (that is, transaction promotion fees collected from merchants) increased by 4% to $8.78 billion this quarter, but it still fell short of the forecast of $8.85 billion.

Despite this, American Express was able to exceed profit expectations, thanks to the good credit conditions of its customers, which enabled the company to maintain low credit loss reserves. The company's total expenditure for the quarter was $12.08 billion, below expectations of $12.74 billion. American Express said the comprehensive credit loss reserve was 1.4 billion US dollars, up from 1.2 billion US dollars in the same period last year.

The CEO of American Express, which is famous for meeting the travel and hotel needs of high consumers, reports that demand for dining out continues to be strong. Additionally, American Express said the company has completed 40 product updates since the beginning of this year to enhance its value proposition and meet the financial and lifestyle needs of customers.

“The strong early performance of our product updates has strengthened my confidence and we are investing in the right areas to enhance our value proposition and meet the financial and lifestyle needs of our customers,” Steve Squery said in a statement.

As of press release, American Express fell 2.97% to $277.30 before the market.