American Express Raises Profit Outlook, But Layoff Plans and Rising Costs Draw Scrutiny

American Express Co. (NYSE:AXP)/a> stock fell Friday despite the credit card giant reporting better-than-expected third-quarter earnings and raising the lower end of its full-year profit outlook.

The company also announced plans to cut about 5% of its global workforce as it moves to reduce costs and simplify operations.

American Express Earnings Beat Estimates

American Express reported third-quarter revenue, net of interest expense, of $20.06 billion, up 9% year over year but slightly below the analyst consensus estimate of $20.12 billion.

Adjusted earnings of $4.68 per share beat Wall Street's estimate of $4.48.

Higher Card Member spending, growing card balances and stronger card fee revenue supported results.

Card Member spending, also known as billed business, rose 8% to $454 billion. Travel and entertainment spending increased 10%.

U.S. Consumer Services revenue climbed 11% to $9.84 billion, while Commercial Services revenue rose 6% to $4.55 billion.

International Card Services revenue increased 10% to $3.68 billion. Global Merchant and Network Services revenue grew 6% to $2.08 billion.

Net card fees jumped 16% to $2.97 billion./p> div class="bz-see-more-ranking-block" data-ranking="momentum" data-theme="light" data-variant="basic-2" >

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Rising Costs And Regulatory Penalty Draw Attention

Total expenses increased 9% to $14.55 billion, reflecting higher customer engagement costs tied to spending growth and the U.S. Platinum Card refresh.

Provisions for credit losses fell to $1 billion from $1.3 billion a year earlier. A reserve release helped offset higher net write-offs.

The net write-off rate improved to 1.8% from 1.9% a year earlier.

American Express also faces a $350 million regulatory penalty related to anti-money-laundering deficiencies.

Management said the enforcement actions would not affect its 2026 guidance or 2027 outlook.

American Express To Cut 3,500 Jobs

CEO Steve Squeri told Bloomberg on Friday that the company plans to eliminate about 3,500 jobs, representing roughly 5% of its global workforce.

The restructuring aims to reduce management layers, simplify operations and accelerate decision-making.

American Express recorded a $253 million after-tax restructuring charge. The company also recognized a $751 million after-tax gain from selling its stake in Global Business Travel Group.

Consumer Spending Remains Resilient

Squeri highlighted continued strength in customer spending, card acquisitions, retention and credit quality.

The company also expanded its premium card offerings through a partnership with Airbnb Inc. (NASDAQ:ABNB)/a>.

The agreement allows eligible luxury rentals booked through Amex Travel to qualify for Platinum cardholders' annual lodging credit.

During the earnings call, Squeri acknowledged that the anti-money-laundering deficiency cited by regulators should not have occurred. He said American Express would address the issue thoroughly and confirmed that the regulatory orders do not impose an asset cap.

CFO Christophe Le Caillec said customer spending patterns remained consistent with the past year, reflecting steady growth.

He also pointed to strong early adoption of the new Graphite Card and said delinquency rates remained low and stable.

American Express Raises Earnings Outlook

American Express maintained its full-year revenue outlook of approximately $79.45 billion, representing about 10% annual growth.

That forecast remains slightly below the analyst consensus estimate of $79.48 billion.

The company raised the lower end of its full-year earnings guidance to $17.60 per share from $17.30. The upper end remained unchanged at $17.90.

The revised range compares with previous guidance of $17.30 to $17.90 per share and Wall Street's estimate of $17.63.

AXP Price Action: American Express shares fell 1.67% to $319.75 at the time of publication Friday, according to Benzinga Pro.

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