American Express (AmEx) has topped Wall Street estimates for third-quarter profit and lifted its yearly earnings forecast, as a strengthening US economy powered higher credit card spending.
The credit-card issuer on Thursday said quarterly card customer spending rose 10.3 per cent in the United States and 5 per cent in overseas markets during the three months ended September 30.
Rising wages and a strong economy have fuelled US consumer spending, with consumer confidence last month reaching its highest level in 18 years.
Payments networks like AmEx and Visa earn fees from merchants every time a consumer swipes a card issued by them. They also make revenue from interest paid by customers on overdue spending.
American Express now expects 2018 adjusted earnings of between $7.30 and $7.40 per share, up from the previous $6.90 to $7.30 range.
AmEx said third-quarter net income climbed to $1.65 billion from $1.36 billion a year earlier. On a per-share basis, AmEx earned $1.88, compared with $1.51 in the prior-year quarter.
Analysts on average had expected $1.77 per share, according to Refinitiv data.
Total revenue, net of interest expense, rose 9.2 per cent to $10.14 billion, above analysts’ estimates of $10.05 billion.
AmEx shares rose 1.6 per cent to $104.50 in extended trading on Thursday.