American Express has reported a remarkable 16% increase in profits for the third quarter, largely driven by spending from affluent cardholders. The company earned $2.9 billion during this period, which is a significant rise from $2.51 billion in the same quarter of the previous year.
Financial Performance
On a per-share basis, earnings reached $4.14, up from $3.49 a year earlier. This performance surpassed analysts’ expectations, prompting American Express to raise its profit forecasts for the full year.
Key Highlights
- Third-quarter profit: $2.9 billion (up 16%)
- Earnings per share: $4.14 (compared to $3.49 a year prior)
- Average spend per card: $6,387 (up 5%)
- Total loans reported: $138.95 billion (up 8%)
Consumer Spending Trends
The increase in profits is attributed to heightened spending across all American Express products. The recent refresh of the Platinum Card has been well-received, despite a higher annual fee of $895. This card’s revamped features were enough to attract customer interest.
Competitive Landscape
The high net worth credit card market has seen intensified competition. Other major players, including JPMorgan Chase and Citigroup, have also updated their offerings to capture more customers. American Express reported receiving a surge in requests for its new card design, with 500,000 requests in just three weeks.
Future Expectations
American Express anticipates earnings per share for the full year to range between $15.20 and $15.50. The company has seen successful engagement, with card acquisition rates doubling compared to pre-refresh levels, indicating strong market interest.
CEO Steve Squeri stated, “The initial customer demand and engagement exceeded our expectations,” reflecting the successful reception of the Platinum Card’s updates.
