Neil DennisAmerican Express reported a forecast-beating 19% rise in third-quarter net income and also reported the departure of long-time chief executive Kenneth Chenault.
Reporting its July-September results after the market close on Wednesday, the company said net income rose 19% to $1.4bn, or $1.50 a share - beating market expectations of $1.47 a share.
Other highlights:
- Third-quarter consolidated total revenues net of interest expense were $8.4bn, up 9%
- Consolidated provisions for losses were $769m, up 53%
- Consolidated expenses were $5.8bn, up 6%
- The effective tax rate for the quarter was 26%, down from 34% a year ago
CEO comment
Departing chief executive Kenneth Chenault said: "We are completing a two-year turnaround ahead of plan with strong revenue and earnings growth across all of our business segments.
“We’ve added products and benefits, shown continued strength in acquiring new customers, and expanded our merchant network.
“Loan growth continued to be strong and credit metrics were again in line with our expectations. We’ve contained operating costs and reallocated a significant part of those savings to fund many of the initiatives that are now driving growth across the business.
"Throughout the turnaround, we’ve dealt effectively with competitive challenges and redesigned our marketing, customer service and risk management capabilities for the digital age.
“We’re starting a new chapter from a position of strength. Based on the momentum in the business, we now expect full year 2017 earnings per share of $5.80 to $5.90. That’s up from our earlier outlook of $5.60 to $5.80.”
New chief executive
With Chenault departing after 16 years at the helm, the credit card company named Stephen Squeri as the new CEO and chairman, effective 1 February next year.
Squeri has been vice chairman since 2015 and was previously president of the company’s Global Corporate Services Group.
Market reaction
The company reported after the US closing bell and shares were 0.7% lower at $91.43 in pre-market trade on Thursday.
