AmEx raises 2024 profit forecast
Credit remains 39;very strong39;, CFO says
Stock drops about 5

Oct 18 Reuters American Express reported thirdquarter profit above Wall Street estimates on Friday, benefiting from disciplined expense management that helped cushion a blow from softer fee growth.

Shares of AmEx fell nearly 5 even as the credit card giant raised its profit forecast for 2024.

The company39;s affluent customers have allowed it to maintain relatively smaller provisions for credit losses compared with peers that serve a broader spectrum of customers, including those with lower income.

It has also showed restraint in managing rewards and other expenses, allowing it to outdo profit expectations even when revenue growth decelerates.

This quarter is another proof point of management39;s ability to flex expenses to hit earnings per share EPS targets when top line is softer, said Citi analyst Keith Horowitz.

AmEx39;s total expenses were 12.08 billion in the quarter, lower than expectations of 12.74 billion, according to estimates compiled by LSEG.

Revenue rose 8 to 16.64 billion but fell short of the 16.67 billion estimate. Discount revenue the fee it earns from merchants for facilitating transactions rose 4, while analysts had expected 5.3 growth.

We do not need doubledigit revenue growth to hit midteens EPS because we are disciplined with our operating expenses. Our credit is also very, very strong, Chief Financial Officer Christophe Le Caillec told…