American Express Co.’s third-quarter revenue and profit soared to record levels as the company continued to attract new cardholders willing to pay an annual fee for its premium products.
(Bloomberg) — American Express Co.’s third-quarter revenue and profit soared to record levels as the company continued to attract new cardholders willing to pay an annual fee for its premium products.
Amex reported $15.4 billion in revenue, topping analyst estimates and surpassing the $13.6 billion it generated in the same period a year prior. That was aided by a 20% increase in net card fees, with Amex saying fee-based cards accounted for more than 70% of all new accounts it added in the quarter.
“Demand for our premium products remains high,” Chief Executive Officer Steve Squeri said Friday in a statement. “The investments we have made in our value propositions are driving brand relevance across generations.”
Net income for the quarter rose 30% to $2.45 billion, or a record $3.30 a share. That was higher than the $2.95 average of analyst estimates compiled by Bloomberg.
Read more: Amex Hooked Big Spenders, Regained Throne With Pricier Platinum
For much of the last few years, Amex has benefited from a resurgence in travel following the pandemic. Now, though, growth in spending on the firm’s cards is slowing as results face tough comparisons to a year ago.
Total network volume jumped 7% to $420.2 billion, missing estimates and the lowest level of growth in ten quarters, according to data compiled by Bloomberg.
“Travel and entertainment spending remained robust,” Squeri said. “Restaurant spending was again one of our fastest-growing T&E categories.”
Amex also joined its credit-card rivals in setting aside more money to cover souring loans, with provisions jumping 58% to $1.23 billion in the third quarter. That beat the $1.18 billion average of analyst estimates compiled by Bloomberg.
The company reiterated its guidance for full year revenue growth to rise as much as 17%, while earnings per share should fall within $11 to $11.40. Longer term, it continues to expect revenue growth in excess of 10%, while profits should rise by a percentage in the mid-teens, Amex said.
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