Overview

• American Express reported record Q3 revenue of $15.38 billion, a 13% year-over-year increase, and earnings per share (EPS) of $3.30, driven by strong cardmember spending on travel and entertainment.
• The credit card provider increased provisions for credit losses to $1.233 billion, up from $1.198 billion in the previous quarter, reflecting higher net write-offs which led to a decline in shares.
• Despite increased provisions for credit losses, American Express continues to expect 2023 revenue growth and EPS in line with its beginning of the year guidance.
• Card spending growth slowed faster than anticipated, with total network volume rising 7% to $420.2 billion marked the slowest growth in ten quarters, while spending by commercial service customers climbed just 1%.
• Despite a slowdown in volume growth, revenue and profit soared to record levels due to continuing new cardholders, willing to pay annual fees for premium products, which accounted for more than 70% of all new accounts in Q3.
• The credit card giant's net interest income increased by 34% year-over-year due to higher interest rates, despite warnings on the impact on discretionary spending.