American Express posts $3.71 billion third-quarter profit, lifts guidance

Full-year earnings range rises to $18.30-$18.60 per share

American Express reported third-quarter profit of $3.71 billion on Friday and raised its full-year earnings forecast as card-member spending continued to rise. The new forecast calls for $18.30 to $18.60 a share, compared with $17.30 to $17.90 previously. A market quote in the report showed AXP up 0.48%.

The company also forecast adjusted earnings of $17.60 to $17.90 a share. That measure excludes the boost from American Express’s sale of an equity investment in Global Business Travel Group, net of a restructuring charge.

American Express said it remained on track for 10% sales growth this year. The updated guidance followed a quarter with higher profit and a 9% increase in revenue net of interest expense.

Third-quarter profit was $3.71 billion, or $5.42 a share, compared with $2.9 billion, or $4.14 a share, a year earlier. Adjusted earnings were $4.68 a share, exceeding the $4.48 analyst estimate cited by FactSet.

Revenue net of interest expense rose 9% to $20.06 billion. Analysts had forecast $20.12 billion.

American Express attributed the increase in sales primarily to higher card-member spending, higher net interest income on growth in card balances and card-fee growth.

Chief Executive Stephen Squeri pointed to strength in billings, new acquisitions and card-member retention. He also described credit quality as excellent.

American Express raised its annual earnings range while retaining its full-year sales-growth target. The quarter produced higher profit and adjusted earnings above the cited estimate, while revenue came in below the analyst forecast.