Amex's 31% Profit-Per-Share Jump Leans On A $982 Million Stake Sale, A Reserve Release And A Tax Break
Adjusted earnings per share rose 13%, and a $350 million regulatory penalty sits in the quarter's results.
American Express reported third-quarter diluted earnings per share of $5.42, up 31% from $4.14 a year earlier, but a $982 million gain on selling its stake in Global Business Travel Group, a credit reserve release and a lower tax rate did much of the lifting. Excluding the gain net of restructuring costs, adjusted EPS was $4.68, up 13%.
Reported versus adjusted
American Express, which issues credit, charge and debit cards, runs a payments network and signs up the merchants that accept them, sold its roughly 30 percent stake in Global Business Travel Group on September 29, as Long Lake completed its acquisition of the company. The pre-tax gain was $982 million, or $751 million after tax, worth $1.11 per share.
Part of the proceeds went toward efficiency initiatives, costing $336 million pre-tax, or $253 million after tax and $0.37 per share, in restructuring. Net income was $3,712 million, and the earnings release put adjusted net income at $3.2 billion. Revenue rose 9% to $20.1 billion.
The stake-sale proceeds of $1.5 billion were booked as a non-cash receivable in Other assets at September 30 and were received afterward, the cash flow notes say.
Credit and tax did the rest
Provisions for credit losses fell to $985 million from $1,287 million a year earlier. Card balance reserves swung to a $235 million release from a $109 million build, which the company tied mainly to enhancements to its loss-estimating models.
The effective tax rate dropped to 18.1% from 24.1%, which the company attributed to discrete tax benefits from resolving prior-period tax items.
A $350 million penalty
On October 8, American Express and a subsidiary consented to a Federal Reserve order, and its bank, American Express National Bank, consented to an order from the Office of the Comptroller of the Currency. They resolve reviews of its financial crimes compliance program, and the bank agreed to a $350 million civil money penalty, part of which had been reserved earlier.
Legal reserves rose by $400 million in the quarter, covering the unreserved part of that penalty plus other previously disclosed matters. The prior quarterly report had said only that the company expected enforcement action.
The company warns that failing to meet the orders could lead to further settlements, fines or restrictions on its businesses. It said it will keep investing in risk and controls.
In Friday trading, shares were at $311.56, down about 4%.
Raised outlook
CEO Stephen J. Squeri said the company is raising full-year EPS guidance to between $18.30 and $18.60, or $17.60 to $17.90 adjusted. He said it is on track for another year of 10 percent revenue growth.
Billed business grew 8%, and net card fees rose 16%, which the company tied to product refreshes including the U.S. Platinum card. It returned $2.2 billion to shareholders through buybacks and dividends in the quarter.
Next quarter, the company expects variable customer engagement costs to grow more slowly, because the U.S. Platinum refresh will then appear in both current and prior-period results.
Sources
- 10-Q Filing — American Express (AXP) — SEC EDGAR
- 10-Q Filing — American Express (AXP), Q2 FY2026 filed 2026-07-24 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, q326exhibit991.htm) — American Express, filed 2026-10-23 — SEC EDGAR
- American Express profit jumps as customers stick with the $895 Platinum Card — Associated Press
- American Express Q3 Earnings Beat Estimates on Strong Card Fees — Yahoo Finance
- American Express Non-GAAP EPS of $4.68 beats by $0.19, revenue of $20.06B misses by $60M (NYSE:AXP) | Seeking Alpha — seekingalpha.com
- American Express Earnings Reveal There’s 1 Consumer Group Not Concerned With High Interest Rates — Barron's
- $1000 Invested In American Express 10 Years Ago Would Be Worth This Much Today — benzinga.com
