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American Express profit rises with a business-travel stake sale

American Express increased third-quarter profit as spending on its network expanded and the sale of its business-travel investment added a substantial gain. Reported earnings per share reached 5.42 dollars; excluding specified items, the figure was 4.68 dollars. Lower credit-loss provisions also supported results, while management issued separate reported and adjusted annual forecasts.

Economics & Markets··Midday
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American Express increases quarterly revenue

American Express, the payments and credit-card group, released its third-quarter results on 23 October. Revenue increased from a year earlier, and adjusted earnings per share reached 4.68 dollars.[1], [2]

Revenue grew 9 per cent to 20.062 billion dollars. Net income rose 28 per cent to 3.712 billion dollars, while reported diluted earnings per share increased 31 per cent to 5.42 dollars. Spending on the company’s network, measured as billed business, expanded 8 per cent to 454 billion dollars.[1]

A stake sale adds a substantial gain

The sale of its investment in business-travel company GBTG generated a gain of 982 million dollars before tax and 751 million dollars after tax. Restructuring charges moved in the opposite direction, reaching 336 million dollars before tax and 253 million dollars after tax. Excluding those items, adjusted net income was 3.214 billion dollars, an 11 per cent annual increase. Adjusted earnings per share rose 13 per cent.[1]

Credit-loss provisions decline as annual forecasts diverge

Credit-loss provisions fell from 1.3 billion dollars to 1 billion dollars. American Express attributed this to a reserve release, compared with a reserve build a year earlier, partly offset by higher net write-offs. Its full-year forecast put reported earnings per share at 18.30–18.60 dollars and adjusted earnings at 17.60–17.90 dollars. Management projected annual revenue growth of 10 per cent.[1]

References

  1. News sourceAmerican ExpressAmerican Express profit rises with a gain from its GBTG sale↩1↩2↩3↩4
  2. News sourceMarketBeatAmerican Express releases third-quarter earnings↩
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