(Reuters) – American Express (NYSE:) reported third-quarter profit above Wall Street estimates on Friday as higher spending on its cards offset the impact of higher loan loss provisions.
The credit card giant is relatively insulated from economic shocks because it serves wealthy customers, but some analysts see limited room for further growth in its market value given that the company’s shares are already trading at record highs.
Increased interest rates and economic uncertainty may also discourage some customers from spending money on unnecessary purchases.
Provisions for credit losses were $1.4 billion in the quarter, compared to $1.2 billion last year.
Still, profit rose 2% to $2.51 billion for the three months ended Sept. 30. On a per-share basis, it earned $3.49 compared to the $3.28 analysts had forecast, according to estimates compiled by LSEG.
“The strong initial results we are seeing following our product refresh reassure me that we are investing in the right areas,” CEO Stephen Squeri said in a statement.
The company’s shares rose 2% before the opening bell, after rising about 53% this year through Thursday. Peers Mastercard (NYSE:) and Visa (NYSE:) are up 20% and 12%, respectively, in 2024.
AmEx revenue rose 8% to $16.64 billion.
