American Express Raises 2026 Earnings-per-Share Floor to $17.60
Key Facts
On October 23, American Express raised the low end of its 2026 adjusted earnings-per-share forecast to $17.60 from $17.30, kept the high end at $17.90 and maintained its forecast for annual revenue growth of 10%. The update came alongside its third-quarter results: net income was $3.71 billion, up 28% year over year, while reported earnings per share reached $5.42. The company said it still expects sales to grow 10% this year, according to Dow Jones Newswires. The earnings-range adjustment raised the low end of the annual forecast without changing the high end or the revenue-growth estimate. The latest results highlight the company’s ability to convert cardholder spending into higher earnings, while showing the effect of a one-time investment gain on the reported figure.
Excluding a one-time gain from the sale of the company’s stake in Global Business Travel Group, earnings per share were $4.68, a figure the Associated Press said beat Wall Street estimates. This measure presents adjusted operating earnings differently from the reported $5.42 per share, which included the effect of the exceptional gain. The adjusted annual forecast also excludes the investment-sale gain, after accounting for restructuring costs, according to Dow Jones Newswires. The company therefore raised the low end of its adjusted annual range to $17.60 while keeping the ceiling at $17.90. Comparing reported and adjusted earnings helps distinguish the effect of the transaction from the earnings underpinning the company’s annual guidance.
On business activity, the average American Express customer spent $6,735 in the third quarter, or $2,245 a month, up 5% from a year earlier, according to the Associated Press. The chief financial officer said some of the spending increase may be tied to inflation and higher airfares, and also pointed to an increase in transactions per card member. The explanation suggests spending growth reflected not only higher purchase amounts but also more transactions, according to the executive’s remarks. In the second quarter, card spending volume rose 9% to $455.8 billion, while revenue increased 10% to $19.6 billion, according to Reuters. The second-quarter figures provide an earlier comparison for spending and revenue growth ahead of the October forecast update, while third-quarter data show customer spending continued to rise, although average spending grew at a 5% pace.
Card fees helped support revenue in the third quarter: net fees rose by more than $400 million from a year earlier and include annual subscriptions for cards such as Platinum, according to the Associated Press. The company had previously raised the annual fee for its Platinum card from $695 to $895. It said most customers who moved to the higher-fee card kept it, linking the fee increase with continued cardholder retention, according to the report. Fee growth came alongside customer spending and the higher floor for the annual earnings forecast. The report did not specify how much Platinum alone contributed to the overall increase in net fees. The figures provided also do not break down the increase attributable to annual fees compared with other sources of card fees.
Commenting on business performance, Chief Executive Stephen Squeri said, “Business momentum continues, with strength in card spending, new member acquisition and retention, and excellent credit quality,” according to Reuters via SRN News. His remarks bring together spending growth, expansion and retention of the member base, and the company’s assessment of credit quality. That description is consistent with the 5% increase in average customer spending in the third quarter and the 9% rise in card spending volume in the second quarter, though those measures cover different periods. In July, second-quarter revenue rose 10% to $19.6 billion, while billed business volume was $455.8 billion, according to Reuters. American Express published those results on July 24, providing the most recent context for its expectation that annual revenue will continue to grow 10%.
Before the third-quarter results were announced, American Express shares closed at $325.17 on October 22, according to EL7 data. That price preceded the results and guidance announcement the next day, so it represents the pre-announcement close and does not measure the share move afterward. The available facts did not include a post-announcement price or the extent of investors’ response to the results. The company announced its results and new guidance on October 23, moving its adjusted annual earnings-per-share range from $17.30–$17.90 to $17.60–$17.90. Expected revenue growth therefore remained at 10%, while the low end of annual earnings was higher than the previous estimate.