After the market closed Wednesday, American Express Co. (NYSE: AXP) reported its third-quarter earnings as $1.40 per share on $8.33 billion in revenue. Thomson Reuters consensus estimates called for $1.36 in earnings per share and $8.35 billion in revenue. The third quarter of the previous year had earnings of $1.25 per share and $8.30 billion in revenue.

The company did not give guidance for the fourth quarter or for the year. Thomson Reuters had estimates for the fourth quarter of $1.39 in earnings per share and $8.59 billion in revenue.

American Express’s segments reported:

• U.S. Card Services reported a 14% increase in net income to $889 million from last year.
• International Card Services net income remained unchanged from the previous year at $142 million.
• Global Commercial Services reported a fall in net income of 22% to $204 million from 2013.
• Global Network & Merchant Services reported a 9% increase in net income to $427 million.

The effective tax rate for the third quarter was 34%, up from 32% in 2013. American Express also noted a return on equity of 28.8%, up from 24.3% last year.

Kenneth I. Chenault, chairman and CEO of American Express, had this to say about the third quarter:

Card Member spending was up 9 percent, a modest acceleration from last quarter, and loan balances grew 5 percent. Revenues continued to rise at a steady pace, but the growth rate is still below our long-term target.

On the cost side of the ledger, operating expense growth remained on track to come in well below our target for the full year and that’s one of the factors that provided the flexibility to invest in both the core business as well as some newer initiatives.

We developed new partnerships and services with Uber, Apple Pay and McDonald’s that are helping us to capitalize on the convergence of online and offline commerce.

Over the course of the third quarter, shares have fallen about 7.5% to close the quarter at $87.28 from the open in early July of $94.33. The range on the quarter was $85.75 to $96.24. However, in the days between the end of the third quarter and the earnings report the share price has drifted even lower. Wednesday’s close of $80.93 was over 7% lower from the close of the third quarter.

The broad markets had a resounding fall Wednesday across the board, and American Express was no different, posting a loss of 2.2% to $80.93 from its previous close $82.74. The initial reaction in the after-hours indicated the share price down over 2% to $79.00.

The shares have a consensus analyst price target of $98.48 and a 52-week trading range of $75.23 to $96.24. The company has a market cap of almost $85 billion.

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