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American Express Third Quarter EPS Up 15% To $1.25; Revenues, Card Member Spending And Loans Continue To Grow

Stocks in this article: AXP

Provisions for losses totaled $331 million, down 2 percent from $339 million a year ago.

Total expenses increased 4 percent to $2.7 billion from a year ago, primarily reflecting higher rewards and marketing expenses, partially offset by lower operating expenses.

The effective tax rate remained unchanged from the year-ago period at 38 percent.

International Card Services reported third-quarter net income of $142 million, down 13 percent from $164 million a year ago.

Total revenues net of interest expense increased 3 percent to $1.4 billion. The increase primarily reflects an increase in commissions and fees and net card fees. Adjusted for foreign currency translations, revenues rose 8 percent from a year ago. 2

Provisions for losses totaled $113 million, up 36 percent from $83 million a year ago. The increase reflects higher net write-offs and a reserve build in the current quarter.

Total expenses increased 3 percent to $1.1 billion primarily reflecting higher rewards and marketing expenses. Adjusted for foreign currency translations, expenses increased 7 percent from a year ago. 2

The effective tax rate was 24 percent compared to 21 percent a year ago.

Global Commercial Services reported third-quarter net income of $261 million, up 43 percent from $183 million a year ago.

Total revenues net of interest expense increased 6 percent to $1.2 billion, reflecting higher Card Member spending and a rise in travel commissions and fees.

Total expenses decreased 1 percent to $844 million, reflecting lower operating expenses, partially offset by higher rewards costs.

The effective tax rate was 23 percent compared to 33 percent from a year ago. The current quarter benefited from a reserve release in the global business travel organization.

Global Network & Merchant Services reported third-quarter net income of $391 million, up 9 percent from $360 million a year ago.

Total revenues net of interest expense increased 5 percent to $1.4 billion from $1.3 billion a year ago, reflecting higher merchant-related revenues driven by an increase in global Card Member spending, as well as an increase in revenues from Global Network Services’ bank partners. Adjusted for foreign currency translations, revenues rose 7 percent from a year ago. 2

Total expenses increased 4 percent to $758 million from $731 million a year ago, reflecting an increase in operating and marketing expenses. Adjusted for foreign currency translations, expenses rose 6 percent from a year ago. 2

The effective tax rate remained unchanged from a year ago at 36 percent.

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