American Express profit surpasses estimate on robust customer spending

American Express surpassed analysts' expectations for third-quarter profit on Friday, as increased spending on its cards compensated for the impact of higher provisions for credit losses .

The company's provisions for credit losses amounted to $1.4 billion in the quarter, up from $1.2 billion in the previous year. However, the profit grew 2% to $2.51 billion for the quarter ending Sept. 30. Earnings per share were $3.49, surpassing analysts' $3.28 forecast from LSEG estimates.

Although the company's focus on affluent customers has provided some protection from economic challenges, analysts think the stock's potential for further growth may be limited, given its current record-high price. High interest rates and economic uncertainty could also deter some customers from spending on non-essentials.

"The strong early results we're seeing from our product refreshes reinforce my confidence that we're investing in the right areas," said CEO Stephen Squeri .

In pre-market trading, American Express shares rose 2%, after gaining 53% year-to-date through Thursday. Competitors Mastercard and Visa saw their shares increase by 20% and 12%, respectively, in 2024.

Revenue for the quarter grew 8%, reaching $16.64 billion.