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American Express increases forecast as card business grows, dealer numbers increase



Higher expenses and credits from card members helped

American Express
Co.


AXP -1.44%

post another strong quarter, even though the cost of the rewards program and other costs have increased

The financial services company that is on the right track a record year in terms of profit and sales, the group raised its full-year forecast on Thursday thanks to growth in the card business, dealer network and lending business.

AmEx, headquartered in New York, now expects annual sales growth of 9% 1

0% and adjusted earnings of $ 7.30 to $ 7.40 per share.

On Thursday, AmEx reported earnings in the third quarter up 22% to $ 1.62 billion, or $ 1.88 per share. In the same quarter last year, earnings were $ 1.33 billion, or $ 1.51 per share.

Net sales after interest expenses increased 9% to $ 10.1 billion.

Analysts surveyed by FactSet projected $ 1.77 in revenue of $ 10.06 billion

Discount revenue, reflecting dealer fees for the acceptance of their cards, remained $ 6.18 billion, the company's largest source of revenue, 8% more than a year ago.

the highest so-called swipe fees, but these costs have been lowered to encourage more traders to accept their cards.

Cardholder spending increased 8% in the most recent period, up 10% on a currency-neutral basis, and AmEx added about 3 million cards.

Overall, expenses increased by 8% compared to the same period last year. The reward for cardholders, the company's largest single-issue, which includes points redeemed for hotels and airline tickets, reached $ 2.4 billion in the third quarter, up 11% from a year ago.

AmEx, which has increased lending, reported $ 77.6 billion in card member credit in the last quarter, compared with $ 75.4 billion in the second quarter and $ 67.9 billion in the same period.

At the same time, the company is building up its loss reserves. Consolidated provisions for losses were $ 817 million, 6% more than a year ago, although the company noted that default rates were stable.

Equities rose 3.6% to $ 103.79 this year.

Write to Maria Armental at [email protected]


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