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The
New York-based company said Friday it earned $3.11 billion, or
$4.53 a share, compared to $2.89 billion, or $4.08 a share, in
the same period a year earlier. The results beat analysts'
forecasts, who were looking for AmEx to earn a profit of $4.40 a
share, according to FactSet.
AmEx continues to benefit from global economic growth that has
disproportionately benefited the wealthy and high net worth
individuals, as its customer bases skews heavily toward those
demographics with the Platinum Card, Gold Card and other
high-end credit cards. Its customers often put almost all of
their spending on credit cards, and pay those cards off at the
end of each month. The average AmEx customers spent $6,759 on
their cards in the quarter, up from $6,393 in the same period a
year earlier.
But at the same time, the company is spending heavily to keep
those customers as it faces increased competition from other
high-end credit card products like JPMorgan Chase's Sapphire
Reserve Card, Citigroup's Strata card and Capital One's Venture
X brand. The company's quarterly expenses rose 12% from a year
ago, costs that went into increased marketing as well as
refreshes of its credit card products.
While the company upped its guidance on how much revenue it
expects to bring in this year, the company did not change its
profit outlook for the year, as the company plans to put more
resources into marketing and bringing in new customers. The
company also expects to put additional investments into
technology like artificial intelligence, like many other Fortune
500 companies.
Those efforts seem to be paying off. The company signed up
another 3 million customers in the second quarter, of which
three-quarters of those new customers signed up for an AmEx card
with an annual fee.
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