Credit card giant American Express reported results that showed continued traction in consumer spending in the third quarter, with earnings of $1.20, up above estimates by $0.23.
Revenues were just slightly above The Street at $7.8 billion versus $7.7 billion, and as has been widely reported, the firm has been looking to move beyond the loss earlier this year of the relationship with Costco. On an adjusted basis, absent the relationship with that retailing behemoth, sales were up 5 percent year over year. Lower rewards spending helped margins, and management was sanguine enough to raise guidance to $5.65–$5.75 for the year, up from $5.40–$5.70.
Management said on the conference call that, in the U.S. consumer segment, the firm remained “on track,” with expectations to capture at least 20 percent of the out-of-store spending conducted by the former Costco members. And, said Amex, growth is being seen across cashback products. Provisions dipped 5 percent year over year, which helped margins.
Separately, Jeff Campbell, who serves as chief financial officer, said that card fees were up 10 percent, driven by Platinum members. “We feel pretty good about that franchise,” he said. In addition, he noted in response to analyst questions that “the majority of our new cardmember acquisitions for some time now have come through digital channels.”