Goldman Sachs Group Inc. analysts on Tuesday raised 2009 through 2011 profit estimates for American Express Co., citing Amex's better-than-expected third-quarter results and "improved consumer trends."
American Express is expected to earn $1.60 a share this year, $2.15 next year and $3.20 in 2011, according to Goldman Sachs. That compares with its analysts' previous estimates of $1.10, $1.60 and $3.05.
Last week Amex said net income fell 21.5% in the third quarter from the year earlier, to $640 million, as revenue dropped 16% because of lower loan volumes and lower spending on its cards.
But the provision for credit losses fell 25.6% from the previous quarter and 13.3% from a year earlier, to $1.2 billion.
The managed chargeoff rate for its portfolio of U.S. credit card loans fell 110 basis points from the previous quarter, to 8.9%, in line with its July forecast that the loss rate had peaked.
Earnings per share fell 17 cents from a year earlier, to 53 cents. Excluding a nonrecurring item, Amex earned 44 cents a share from continuing operations, 6 cents more than the average analyst estimate.