Earnings
American Express raises its 2026 profit forecast as card spending climbs 8% and credit losses ease
Billed business reached $454 billion in the third quarter, while a one-off gain on the GBTG stake sale lifted reported earnings per share 31%.
HedgeWeekly News Desk ·
American Express raised its full-year 2026 earnings forecast on Friday after third-quarter revenue net of interest expense rose 9% to $20.06 billion. Net income increased 28% to $3.71 billion, or $5.42 a diluted share, compared with $4.14 a year earlier.
The reported figure was flattered by a $982 million pretax gain on the sale of the company's stake in Global Business Travel Group, partly offset by a $336 million pretax restructuring charge for efficiency programmes. Excluding both, earnings rose 13% to $4.68 a share. Billed business grew 8% to $454.0 billion, and total expenses also rose 9%, to $14.5 billion.
Credit held up. Provisions for credit losses fell to $1.0 billion from $1.3 billion, as the card issuer released reserves in the quarter after building them a year earlier, and the net write-off rate on principal edged down to 1.8% from 1.9%. The company now expects 2026 earnings of $18.30 to $18.60 a share, or $17.60 to $17.90 on an adjusted basis, with revenue growth of about 10%. Average diluted shares fell 3% to 674 million.
Why it matters: the 31% jump in reported EPS rests largely on a one-time asset sale, so the 13% adjusted gain and the new adjusted range are the cleaner gauge of the core card business. A reserve release paired with a lower write-off rate shows the company is not provisioning for weaker repayments among its cardholders, a useful read on higher-spending US consumers. The next test is whether billings growth holds near 8% through the holiday quarter, which falls inside the raised forecast.