American Express has announced its financial results for the third quarter, revealing higher revenue and profit driven by strong spending by its cardholders. Here are the key details:
The credit card company recorded a profit of $2.45 billion, or $3.30 per share, compared to $1.88 billion, or $2.47 per share, in the same period last year. Analysts surveyed by FactSet had estimated earnings of $2.95 per share.
Revenue increased by 13% to $15.38 billion, surpassing analysts' expectations of $15.36 billion.
- Cardholder spending witnessed a 7% growth, with a significant contribution from a 9% increase by U.S. consumer cardholders and a 15% rise from international card services (adjusted for foreign exchange).
- Chief Executive Stephen Squeri highlighted that spending on travel and entertainment played a crucial role in boosting the overall volume, which saw a 13% rise on an FX-adjusted basis.
- The company's Resy restaurant-booking platform achieved record-breaking reservations during the quarter.
- American Express reported that its customers' credit metrics remain strong, with net write-offs and delinquency rates for card member loans and receivables still below pre-pandemic levels.
- However, the company set aside $1.2 billion for credit losses, compared to $778 million in the same period last year, indicating higher net write-offs.
American Express shares surged over 2% to reach $153 in premarket trading following the announcement. As of the market close on Thursday, the stock has shown a year-to-date increase of approximately 1%.
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