American Express Posts Sixth Consecutive Quarter of Record Revenue for Q3 2023

Bank card big American Express (NYSE: AXP) has revealed its income report for Q3 of 2023, pointing to document income for six consecutive quarters. In accordance with an official press release, the corporate’s whole income internet of curiosity expense got here in at $15.38 billion, a 13% improve over the $13.5 billion recorded for a similar quarter in 2022. The corporate mentioned this improve was primarily from “larger common mortgage volumes and elevated Card Member spending.” 

American Categorical additionally introduced that its internet revenue for the quarter was $2.5 billion or $3.30 per share, a lot larger than the $1.9 billion or $2.47 per share realized in the identical interval final 12 months. The report additionally famous that whole Card Member spending rose 7% from final 12 months on an FX-adjusted foundation, with US shopper Card Member spending rising 9%. Worldwide Card Companies additionally climbed by 15%.

Chairman and CEO Stephen J. Squeri mentioned the corporate’s investments are serving to model relevance throughout generations. Noting that the fastest-growing customers are Gen Z and millennials, Squeri mentioned each generations accounted for 60% of all new buyer accounts in 2023 and spent 18% greater than final 12 months.

Squeri is optimistic that American Categorical will meet its steering for the 12 months. The CEO mentioned:

“Primarily based on our efficiency to this point, we stay assured in our skill to realize income development and EPS for the complete 12 months per the annual steering we offered at the beginning of the 12 months. We imagine we’re effectively positioned as we search to realize our long-term development plan aspirations in 2024 and past in a steady-state macro setting.” 

Q3 Report Exhibits American Categorical Spent Extra on Buyer Engagement

Notably, larger buyer engagement prices from community volumes and elevated utilization of travel-related advantages drove consolidated bills 7% larger, from $10.3 billion a 12 months in the past, to $11 billion.

Within the US alone, whole bills for Q3 2023 grew 8%, from $4.5 billion final 12 months to $4.9 billion, brought on by elevated buyer engagement prices. American Categorical provisions for credit score losses additionally climbed to $752 million, larger than the $403 recorded within the year-ago quarter.

For Worldwide Card Companies, whole revenues internet of curiosity expense climbed 17% (12% FX-adjust) from $2.3 billion final 12 months to $2.6 billion this 12 months. This was primarily from larger Card Member spending and elevated card charge income.

American Categorical inventory is at a $149.25 worth in premarket buying and selling after falling 0.25% from its earlier shut at $149.62. Whereas AXP has gained practically 7% up to now 12 months, the inventory solely climbed 1.27% year-to-date (YTD). During the last three months, AXP has dropped by greater than 12%.

In Might, Coinspeaker reported that American Categorical is deploying synthetic intelligence (AI) instruments to validate transactions and approve strains of credit score. As well as, the corporate plans to make use of AI to raised buyer experiences by analyzing sentiments to make predictions. The corporate is trying to companion with an current giant language mannequin (LLM) as a substitute of making its personal. 

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