American Express Company (NYSE: AXP) reported third quarter 2019 earnings results that beat market’s views, helped by the higher cardmember spending. The fintech service firm earned $2.08 per share on revenue of $10.99 billion for the third quarter. Analysts had projected the company to post earnings of $2.03 per share on revenue of $10.95 billion. AXP stock rose about 2% in the pre-market trading session.
Click below to view American Express’ Q3 2019 earnings infograph.
American Express’ revenue growth in the recently ended quarter was driven by a mix of Card Member spending, loans and membership revenues from fee-based products, which grew 19% and exceeded $1 billion this quarter for the first time.
The New York-based payment processing company added 2.9 million new proprietary Card Members in the quarter ended September 30, 2019. Looking ahead, American Express expects to deliver high levels of revenue growth and double-digit EPS growth.
American Express also reaffirmed its 2019 EPS guidance range and expects revenue growth of 8% to 10% for the fourth quarter of 2019. Earlier, the company had forecasted full-year 2019 GAAP EPS to come in the range of $7.64-8.14 and adjusted EPS in the range of $7.85-8.35.
“The trends we saw in the business this quarter continue to be consistent with an economy that continues to grow, albeit at a more modest pace than last year. FX-adjusted proprietary Card Member spending rose 7%, led by strong consumer growth in both the U.S. and International markets. Our loan portfolio grew 9%, with over 60% of that growth again coming from existing Card Members,” said CEO Steve Squeri.
Consolidated expenses increased 9% to $7.8 billion due to the growth in rewards and other customer engagement costs driven by increased Card Member spending and continued investments in cobrand partnerships. Operating expenses were up 5% from the year-ago quarter, driven by salaries and employee benefits.
American Express stock had gained 25% since the beginning of this year and 14% in the past 52 weeks.