American Express Co. has outperformed profit expectations in the third quarter, with strong spending and positive credit metrics. The company recorded a net income 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 had predicted earnings of $2.95 per share, according to FactSet.
Total revenues, excluding interest expenses, increased to $15.4 billion from $13.6 billion a year ago, marking Amex’s sixth consecutive quarter of record revenue. This revenue figure matches the FactSet consensus.
Amex also reported a 7% increase in total network volumes, reaching $420.2 billion. The company highlighted strong overall spending, particularly in the travel and entertainment sector, where expenditures rose by 13%. The growth in dining out contributed to this surge in spending, making restaurant transactions one of the fastest-growing categories in the third quarter.
Amex attributes its success to the investments made in value propositions, which have effectively increased brand relevance across different generations. The company noted that Millennial and Gen Z consumers are its fastest-growing consumer cohort and saw an 18% increase in spending by these groups during the quarter.
While total provisions for credit losses rose to $1.2 billion from $778 million, Amex remains confident due to strong credit metrics. Net write-off rates and delinquency rates remain below pre-pandemic levels.
CEO Stephen Squeri expressed optimism about achieving long-term growth plans in a stable macroeconomic environment. Amex is well-positioned to pursue its aspirations beyond 2024.
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