Key Moments
- American Express raised its 2026 annual earnings forecast to $18.30-$18.60 per share from a prior range of $17.30-$17.90
- Third-quarter billed business increased 8% to $454 billion, while revenue grew 9% to $20.1 billion
- Provisions for credit losses declined to $1 billion in the quarter from $1.3 billion in the same period a year earlier
Outlook Raised on Robust Third-Quarter Performance
American Express Co (AmEx) increased its profit forecast for 2026 after posting strong third-quarter results, supported by sustained spending from its affluent cardholders on travel, dining, and retail purchases.
The company now projects annual earnings in 2026 in a range of $18.30 to $18.60 per share, up from its previous guidance of $17.30 to $17.90 per share. The revised outlook followed the earnings release, with the stock last trading 0.8% higher in premarket activity.
Premium Customer Strategy Underpins Growth
AmEx has concentrated on cardholders with higher credit scores and greater disposable income, a strategy that has helped insulate its business from broader economic slowdowns and uncertainty. By focusing on this premium segment, the company has sought to create a durable competitive position.
Billed business – a gauge of total spending on all American Express-issued cards – rose 8% in the third quarter to $454 billion. Revenue for the period increased 9% to $20.1 billion.
“Business momentum continues, with strength in billings, new acquisitions and Card Member retention, and excellent credit quality,” AmEx CEO Stephen Squeri said in a statement.
| Metric | Third Quarter | Year-Ago Period |
|---|---|---|
| Billed business | $454 billion | – |
| Revenue | $20.1 billion | – |
| Adjusted earnings per share | $4.68 | $4.14 |
| Provisions for credit losses | $1 billion | $1.3 billion |
Expanding the Franchise Among Younger Customers
The company has been investing heavily to draw in younger demographics, particularly Gen Z and millennials. By targeting these segments, AmEx aims to cultivate long-term relationships and broaden its international presence to support future growth.
Adjusted profit for the quarter ended September 30 increased to $4.68 per share from $4.14 per share in the same quarter a year earlier.
Spending Trends and Consumer Health Signals
Although American Express focuses primarily on premium customers and does not represent the full spectrum of consumer activity, its results provide an early view into spending habits among higher-income individuals. This can offer investors clues about trends in discretionary spending.
Executives at large U.S. banks, when reporting their own results earlier this month, also pointed to continued resilience among consumers across different income levels, citing ongoing strength in spending and stable credit performance.
Credit Quality and Provisions
American Express recorded $1 billion in consolidated provisions for credit losses during the quarter, down from $1.3 billion in the same period a year earlier.
These loan-loss provisions – often called rainy-day reserves – represent funds set aside by lenders to cover anticipated credit losses, providing insight into their expectations for borrowers’ ability to meet debt obligations.
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