American Express Company (NYSE:AXP) reported impressive third-quarter results, defying concerns about an economic downturn.
The company, known for serving a premium customer base, attributed its success to resilient spending by wealthy clients and its ability to manage the impact of inflation and Federal Reserve rate hikes effectively.
Despite economic uncertainties, AmEx announced a profit of $3.30 per share, exceeding analysts' expectations and marking a significant increase from the previous year.
The strong performance was driven by high demand for its premium products, such as the Amex Platinum Card and Business Gold Card.
The company's 3Q revenue reached a record-breaking $15.4 billion, surpassing both analyst forecasts and the previous year's 3Q figure.
AmEx has been focusing on enhancing its Platinum Card, which carries a $695 annual fee, and plans to raise the annual fee for the Business Gold Card from $295 to $375.
American Express also increased its provisions for credit losses by 58% to $1.23 billion, reflecting concerns about consumers defaulting on debt due to economic uncertainties. Nevertheless, the company reported that net write-off and delinquency rates remained below pre-pandemic levels, highlighting its proactive risk management.
The company's net income reached an all-time high at $2.45 billion, equating to $3.30 per share, surpassing the average analyst estimate.
Despite the earnings beat, shares of American Express were down nearly 4% on Friday morning at $143.82.