American Express Surpasses Q3 Earnings Expectations Thanks to Strong Consumer Spending
20 Outubro 2023 - 9:33AM
IH Market News
American Express (NYSE:AXP), the prominent credit card issuer,
reported a third-quarter profit that surpassed market expectations.
This feat was achieved with the support of affluent customers who
displayed strong spending habits, disregarding concerns about an
impending economic downturn.
Catering primarily to a premium clientele, AmEx has adeptly
navigated the challenges posed by inflation and the Federal
Reserve’s interest rate hikes, which have heightened borrowing
costs and curtailed discretionary expenditures.
CEO Stephen Squeri noted, “Travel and Entertainment (T&E)
spending remained robust, with restaurant spending ranking among
our fastest-growing T&E categories,” in a recent statement.
The company’s profits reached $2.45 billion, or $3.30 per share,
marking an increase from $1.88 billion, or $2.47 per share,
recorded in the previous year. Analysts had, on average,
anticipated earnings of $2.94 per share, as reported by LSEG IBES
data.
However, in a sign of prudent risk management, AmEx raised its
provisions for credit losses to $1.23 billion, reflecting a 58%
increase from the previous year. This move was made to account for
the heightened likelihood of consumers defaulting on their
debts.
Furthermore, the company reported a significant revenue increase
of 13%, amounting to $15.38 billion, after accounting for interest
expenses.
American Express (NYSE:AXP)
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