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.

Join the discussion: Connect with other investors on your favorite stocks or explore the top-talked-about stocks on our Breakout Boards.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.