Earnings Results: American Express sees continued spending recovery as earnings easily top expectations

American Express’s
AXP,
-1.19%
revenue net of interest expense grew to $10.9 billion from $8.8 billion, while analysts had been modeling $10.5 billion. Cardholder spending accelerated and was up 19% relative to the third quarter of 2019, the company disclosed in its release.

The stock rose 0.3% in premarket trading.

The company benefited from a “a continued rebound in travel and entertainment spending,” Chief Executive Stephen Squeri said in the release. Restaurant spending was “notably resilient” and showed growth above pre-pandemic levels.

He also highlighted that Amex has made progress with its efforts to attract younger customers, with spending by millennial and Gen-Z cardholders up 38% compared with the third quarter of 2019. The company acquired 2.6 million new proprietary cards in the quarter and saw “all-time highs” in acquisitions of U.S. consumer and small-business Platinum and Gold cards.

“We’re operating from a position of strength, and we see more opportunity ahead to drive sustainable, long-term growth,” Squeri said. Amex is “confident in our ability to be within the high end of the range of the EPS expectations we had for 2020 in 2022.”

The company’s consolidated provisions for credit losses amounted to a $191 million benefit in the third quarter, whereas the company saw a provision expense of $665 million in the year-earlier period. Amex noted that the change largely reflected $393 million in credit reserve releases as well as lower net write-offs during the most recent period.

Shares of American Express have added 3.8% over the past three months as the Dow Jones Industrial Average
DJIA,
-0.02%
has risen 2.2%.