American Express has reported an increase of 2% in its net income for the third quarter of 2024 (Q3 2024) at $2.51bn, compared to $2.45bn in the same quarter of the previous year.
In the preceding quarter, that is Q2 2024, the American bank holding and financial services company had a net income of $3bn. which was boosted by a one-time gain from the sale of risk management platform Accertify.
American Express’ diluted earnings per common share (EPS) for the reported quarter was $3.49, an increase of 6% compared to $3.3 in Q3 2023.
The total revenue of the company in Q3 2024 ended 30 September 2024 was $16.6bn, a growth of 8% compared to $15.4bn in the corresponding quarter of the previous year.
This rise was mainly attributed to higher net interest income, driven by increased loan volumes, steady growth in card member spending, and accelerated growth in card fee revenue.
In the third quarter, American Express’ total card member spending rose by 6%, while card fee revenue growth accelerated to 18%.
The company is said to have attracted 3.3 million new premium card members, while maintaining high retention rates, strong credit performance, and expense discipline.
Citing its strong performance to date and robust earnings from its core business, American Express has raised its full-year EPS guidance to $13.75-$14.05, up from the previous range of $13.3-$13.8.
The company also anticipates its full-year revenue growth within the annual guidance range provided at the beginning of the year at around 9%.
American Express chairman and CEO Stephen Squeri said: “We had another strong quarter that reflects the earnings power of our business model and our continued investments for growth.
“Third-quarter revenue reached another record of $16.6 billion, up 8%, and earnings per share of $3.49 was up 6%, year-over-year.”
American Express’ consolidated provisions for credit losses reached $1.4bn, up from $1.2bn the previous year. This increase was driven by higher net write-offs due to rising loan balances, partially offset by a reduced net reserve build year-over-year.
The company posted consolidated expenses of $12.1bn, marking a 9% rise from $11bn reported in Q3 2023. This was due to higher variable customer engagement costs, fuelled by elevated card member spending and greater utilisation of travel-related benefits, along with increased marketing investments and operating expenses, said American Express.
