Amex Profit Beat Clouded by Higher Costs and Staff Cuts
American Express reported third-quarter revenue of about $20.1 billion, up 9% from a year earlier, though the result slightly missed analyst expectations. Adjusted earnings per share reached $4.68, topping forecasts, while reported EPS was $5.42 after a gain from selling its Global Business Travel Group stake and some restructuring charges. Shares fell nearly 3% as investors focused on rising rewards expenses, slower spending growth, and a plan to cut roughly 5% of the global workforce.
American Express lifted the bottom of its full-year adjusted profit range to $17.60 a share and kept the top at $17.90. It also reiterated an outlook of roughly 10% yearly revenue growth. Third-quarter billed business rose 8% to $454 billion, with travel and entertainment outlays especially firm, though overall card spending growth eased from the prior quarter.
The company has raised its Platinum Card annual fee from $695 to $895 while adding benefits, making rewards and card perks a larger cost consideration. It also intends to remove about 5% of jobs worldwide. Reported results included a gain from selling its Global Business Travel Group holding, partly offset by restructuring charges.
The planned 5% workforce reduction could affect employees and local communities through lost income and reduced job security. Higher premium-card fees may prompt some cardholders to reassess costs, while richer rewards could benefit frequent travelers. Investors’ focus on expenses may pressure the company to balance perks and profitability, potentially influencing how credit-card firms design consumer benefits and employment.