An indication with the American Express logo is seen outside a restaurant in Des Plaines, Illinois.
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Credit card giant American Express The company raised its full-year profit forecast on Friday as its wealthy clients continued to spend heavily on travel, dining and entertainment.
The company also reported better-than-expected second-quarter earnings, underscoring the advantages it has achieved by specializing in a premium customer base.
AmEx’s wealthy cardholders have somewhat insulated the corporate from the final economic downturn, at the same time as rival lenders warn of weak demand on account of high credit costs.
“The increased size, combined with our high-quality, credit-worthy customers, our well-controlled cost base and our successful investments … strengthens the profitability of the core business,” CEO Stephen Squeri said in a press release.
The company expects earnings per share within the range of $13.30 to $13.80 for 2024, in comparison with the previously forecast range of $12.65 to $13.15. In the second quarter ended June 30, earnings were $3.02 billion, or $4.15 per share, up 39% from a yr earlier.
Excluding a one-time gain from the sale of its fraud prevention technology division Accertify, the corporate earned $3.49 per share, above analysts’ estimates of $3.24 per share, in line with LSEG data.
Revenue rose 9% to a record $16.33 billion, but fell wanting LSEG’s estimate of $16.59 billion. Shares of the New York-based company fell 2% in premarket trading.
Last month, the corporate agreed to buy restaurant reservation platform Tock from Squarespace to expand its presence within the restaurant industry.
Analysts say the acquisition could support AmEx’s efforts within the small and medium-sized business market.
Despite the recent slowdown in SMB spending growth, AmEx views the segment as lucrative.
