American Express Beats Q3 Estimates with EPS of $3.49; Raises Guidance to $13.75–$14.05 as Millennials' Spending Jumps 12%

Oct 18, 2024, 11:51 AM

American Express reported third-quarter earnings per share of $3.49, surpassing Wall Street estimates, driven by robust customer spending especially among affluent customers and millennials. The company raised its full-year earnings guidance to between $13.75 and $14.05 per share, reflecting confidence in continued growth. Card member spending increased 6%, with card fee revenue up 18%, and 3.3 million new card acquisitions during the quarter. Millennials and Gen-Z consumers accounted for 80% of new accounts acquired on the US Consumer Gold Card, with millennials' spending up 12% year-over-year. Despite an increase in provisions for credit losses by 10% year-over-year, delinquencies and charge-offs remained below 2019 levels. US corporate spending remained sluggish, with large companies' spending flat and small and medium-sized enterprises slowing further. The CEO noted that while the U.S. consumer is stable, spending levels are lower than in the post-COVID period. The impact of Federal Reserve rate cuts on net interest income is considered minimal. American Express executives expressed confidence in achieving mid-teens earnings per share growth in 2025. Shares reacted positively to the earnings report in premarket trading.