American Express reported better-than-expected earnings for the third quarter, fueled by consistent spending from its cardholders. For the third quarter ending September 30, the company earned $2.51 billion, or $3.49 per share, compared to $2.45 billion, or $3.30 per share, a year earlier. This exceeded analysts’ expectations of $3.27 per share.
Total revenue hit $16.64 billion, aligning with Wall Street estimates. Wealthier cardholders continued to spend despite economic challenges, with customers charging $387.3 billion, up 6% from last year. Merchants pay American Express a transaction fee of 2-4%, greatly contributing to earnings.
American Express also noted a rise in outstanding card member loans, totaling $134.5 billion, an increase of 14%. This boosted interest income by 17% to $6.15 billion. Despite rising expenses of $12.1 billion, the company raised its full-year earnings outlook to between $13.75 and $14.05 per share.
The company has seen significant growth, particularly from millennials and Gen Z consumers, whose spending increased 12% in the third quarter due to targeted perks such as travel and entertainment. However, shares fell 2.5% in premarket trading, reflecting market concerns about economic volatility and inflation.
This article includes reporting from The Associated Press.
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