Released on October 20, 2023, American Express Co (AXP, Financial)'s third-quarter earnings report shows a continued upward trajectory for the company. The financial services giant reported a 13% increase in revenue from the same period last year, reaching a record $15.4 billion. This marks the sixth consecutive quarter of record revenue for the company.
Financial Performance and Key Metrics
Net income for the third quarter was $2.5 billion, a 30% increase from $1.9 billion in Q3 2022. Earnings per share also saw a significant rise, increasing by 34% to a record $3.30. Total network volumes increased by 7% to $420.2 billion, while total revenues net of interest expense rose by 13% to $15,381 million.
Provisions for credit losses saw a significant increase of 58% to $1,233 million, reflecting higher net write-offs partially offset by a lower net reserve build. Despite this, American Express Co (AXP, Financial) maintained strong credit performance, with net write-off and delinquency rates for total Card Member loans and receivables remaining below pre-pandemic levels.
Driving Factors and Commentary
Stephen J. Squeri, Chairman and CEO of American Express Co (AXP, Financial), attributed the strong results to continued growth in Card Member spending and best-in-class credit performance. He stated:
We reported another quarter of record revenues and earnings per share, which increased 13 percent and 34 percent, respectively, from a year earlier, reflecting the continued momentum we have built in our business over the last few years."
Card Member spending was up 7% from a year earlier on an FX-adjusted basis, with spending by U.S. consumer Card Members up 9% and spending in the International Card Services segment up 15% on an FX-adjusted basis. Travel and Entertainment spending remained robust, increasing 13% on an FX-adjusted basis.
Looking Ahead
Based on the company's performance to date, American Express Co (AXP, Financial) remains confident in its ability to achieve revenue growth and EPS for the full year consistent with the annual guidance provided at the start of the year. The company believes it is well positioned to achieve its long-term growth plan aspirations in 2024 and beyond in a steady-state macro environment.
