Earnings

Amex Reports Card Member Spending Up 8 Pct In 3Q

American Express posted results Thursday (Oct. 18) that showed increases in card member spending and a boost in lending activity.

Overall, billed business gained 8 percent to $294.7 billion, filings showed. Billed business is defined as transaction volume, including cash advances. The company said in its release that total card member spending was up 8 percent, and 10 percent when adjusted for FX.

In terms of headline numbers, American Express posted a profit of $1.88, which beat expectations by $.11. Revenues of $10.1 billion edged expectations of $10.05 billion. Discount fees, which are charged to merchants, stood at $6.2 billion, gaining 8 percent for the year.

Top-line segmentation showed that total consumer services revenues, net of interest expense, was $5.4 billion, while commercial services was $3.2 billion.

CFO Jeff Campbell said on the call that in “our small and mid-sized enterprise card members or SMEs, U.S. SME was up 10 percent… International SME remains our highest growth customer segment with 23 percent FX adjusted growth in the third quarter.”

Drilling down into the numbers, the company said average card member spending in the quarter came to $4,784, which was up 4 percent year on year as defined by average proprietary, basic card member spend. Breaking that down, in the United States, spending was just over $5,100, up 3 percent. Outside the United States, that tally was just more than $3,800, gaining 7 percent year over year.

Campbell said that international consumer growth was 18 percent in the quarter, where FX adjusted growth was 13 percent in Japan, 14 percent in Mexico and more than 20 percent in both Australia and the United Kingdom.

In terms of loan activity, American Express said total card member loans were $77.6 billion, which was a gain of 14 percent year over year. The vast majority of the loans on the books came from the U.S. with $68.1 billion.

The card count, said the company, was 115.1 million, up 2 percent. Growth in card count was 7 percent in the U.S. to 53 million, while a slight decline was seen outside the U.S., down 2 percent.

Total provision for losses was $817 million, up 6 percent. The company said that its delinquency rates have held stable.

Looking ahead, American Express said earnings should range from $7.30 to $7.40 for the year. That range was tightened and boosted at the low end from $6.90. Consensus stands at $7.29, as estimated when headed into the earnings announcement.

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