The Business Times

AmEx quarterly profit up on resilient spending

Published Fri, Oct 21, 2022 · 07:30 PM

AMERICAN Express (AmEx) said on Friday (Oct 21) its third-quarter profit had modestly improved as spending on goods, services and travel kept up despite fears of a potential economic slowdown later in the year.

The company said it now expects to report full-year profit above its prior forecast of US$9.25 to US$9.65 per share.

“The demand for travel has exceeded our expectations throughout the year,” said chief executive officer Stephen J Squeri.

Travel and entertainment spending volumes in international markets surpassed pre-pandemic levels for the first time this quarter, he added.

AmEx’s revenue rose 24 per cent to US$13.6 billion in the third quarter, helped by a 21 per cent jump in card member spending on the back of a rebound in cross-border travel as people shrugged off rising airfare to throng airports after a long hiatus due to the pandemic. The company added 3.3 million new proprietary cards.

Still, the card lender built provisions of US$778 million in the reported quarter to prepare for potential defaults, a sharp contrast from a year earlier when the economy’s rapid recovery from the pandemic allowed it to release reserves of US$191 million.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

VIEW ALL

Shares of the company were down 3.5 per cent at US$137.50 in premarket trading.

AmEx’s expenses rose 19 per cent as it spent heavily on customer engagement and compensation. Last month, the company said it was looking to hire around 1,500 people for technology roles, even as other US financial companies have slashed headcount in recent months.

Net income rose 3 per cent to US$1.88 billion or US$2.47 a share in the three months ended Sep 30, compared to US$1.83 billion, or US$2.27 a share, a year earlier.

Analysts had estimated the company to report a profit of US$2.41 a share, according to data from Refinitiv IBES. It was not immediately clear if the reported numbers were comparable to estimates. REUTERS

KEYWORDS IN THIS ARTICLE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

Banking & Finance

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here