American Express Co., the largest U.S. credit-card issuer by purchases, posted third-quarter profit that beat analysts’ estimates and raised its full-year forecast for profitability.
Net income fell 9.8 percent to $1.14 billion, or $1.20 a share, from $1.27 billion, or $1.24, a year earlier, the New York-based company said Wednesday in a statement. Adjusted profit, which excludes some items, was $1.24 a share, topping the 96-cent average estimate of 23 analysts surveyed by Bloomberg.
“Strong operating discipline and credit quality helped to keep us ahead of the 2016 financial outlook that we first provided at the beginning of the year,” Chief Executive Officer Kenneth Chenault, 65, said in the statement.
Amex has vowed to trim $1 billion in expenses by the end of 2017 as it grapples with the loss of its biggest co-brand partner Costco Wholesale Corp. Amex has said quarterly results will be uneven as the firm is also boosting spending on marketing and other incentives, investing in new products and bolstering existing card rewards.
Amex raised its full year EPS forecast to $5.65 to $5.75 from $5.40 to $5.70, while the prediction for 2017 remains unchanged at $5.60.
Shares of American Express have fallen 12 percent this year as the company parted ways with Costco, which accounted for 20 percent of Amex’s worldwide loans and 8 percent of customer spending. Banks and rival networks have bid aggressively to wrest away these partnerships, and Chenault has vowed to avoid pursuing any deals where the terms don’t make economic sense. American Express rose 3.3 percent to $63.28 at 4:07 p.m. in New York, after announcing the results.