How American Express Fell Short in Q3

By Chris Lange Published Oct 23, 10:14AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

American Express Co. (NYSE: AXP | AXP Price Prediction) released its third-quarter financial results before the markets opened on Friday. The company said that it had $1.30 in earnings per share (EPS) and $8.75 billion in revenue, which compares with consensus estimates of $1.33 in EPS and revenue of $8.66 billion. The same period of last year reportedly had EPS of $2.08 on $10.99 billion in revenue.

[in-text-ad]

Third-quarter consolidated total revenues net of interest expense were $8.8 billion, down 20% from $10.99 billion a year ago. The quarter primarily reflected declines in Card Member spending and the average discount rate compared to the prior year.

Consolidated provisions for losses were $665 million, down 24% from $879 million a year ago. The decrease primarily reflected a modest reserve release and lower net write-offs. Total credit reserve levels at the end of the third quarter were generally consistent with second-quarter levels.

[nativounit]

In terms of its segments, Amex reported as follows:

Global Consumer Services Group reported third-quarter net income of $855 million, compared with $991 million a year ago. Total revenues net of interest expense were $5.2 billion, a decrease of 16% year over year.
Global Commercial Services posted net income of $220 million, compared with $568 million a year ago. Total revenues net of interest expense decreased 23% to $2.5 billion.
Global Merchant and Network Services reported net income of $263 million, compared with $523 million last year. Total revenues net of interest expense decreased 27% to $1.1 billion.
Corporate and Other reported a third-quarter net loss of $265 million, compared with a net loss of $327 million a year ago.

The company offered no guidance for the fourth quarter. However, analysts are calling for $1.44 in EPS and $9.63 billion in revenue for the quarter.

American Express stock traded down 2.5% early Friday at $102.15, in a 52-week range of $67.00 to $138.13. The consensus price target is $106.04.

[recirclink id=802865][wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.