American Express Co. (NYSE: AXP) reported second-quarter 2018 results after markets closed Wednesday. The financial services giant posted diluted earnings per share (EPS) of $1.84 per share on revenues of $10 billion. In the same period a year ago Amex posted EPS of $1.47 on revenues of $9.17 billion. Consensus estimates called for EPS of $1.82 and revenues of $10.05 billion.

Net income rose 21% to $1.6 billion on a 9% rise in revenues. The increase in revenue was attributed to higher spending, higher loan volumes, and more fee income.

Consolidated expenses rose 7% to $7.1 billion reflecting higher rewards expenses and associated marketing costs and business development.

The company’s effective tax rate fell from 31% in the year-ago quarter ($613 million) to 21% ($468 million).

CEO Stephen J. Squeri said:

Revenue growth was driven by broad-based increases in Card Member spending and fees. It also reflected the benefit of higher loan volumes, which that spending helped to generate. With total Card Member spending up 10 percent and 2.9 million new cards acquired, we are both strengthening relationships with current customers and attracting new ones through innovative products and services.

For 2018 Amex expects revenue to increase by at least 9% year over year and the CEO reiterated EPS guidance of $6.90 to $7.30. Analysts were looking for EPS of $7.24 and had forecast revenues of $40.29 billion. The company’s revenue guidance is far below the analysts’ estimate.

Shares traded down about 2.9% after hours on Wednesday at $100.00 in a 52-week range of $83.33 to $103.24. The consensus 12-month price target is $109.68.

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