REUTERS: Credit card issuer American Express Co reported a higher-than-expected quarterly profit that highlighted the health of the US consumer even as fears mount that a manufacturing-led weakness could spread to the broader economy.
US retail sales fell for the first time in seven months in September, adding to concerns after data showed a moderation in job growth and services sector activity in the last month.
New York-based AmEx, for long the preferred choice of affluent Americans for credit cards, however, quelled investor concerns with its ninth straight quarter of foreign exchange adjusted revenue growth of at least 8 per cent.
"The trends we saw in the business this quarter continue to be consistent with an economy that continues to grow, albeit at a more modest pace than last year," Chief Executive Officer Steve Squeri said.
US big banks' quarterly results also showed that American consumers are helping to prop up the economy, even as recession fears have led businesses to pull back on spending and borrowing.
"We see a long runway to sustain this performance. In the (fourth quarter), we expect revenue growth to continue with the strong levels we have seen," Chief Financial Officer Jeffrey Campbell told analysts on a post-earnings conference call.
AmEx reaffirmed its 2019 adjusted earnings per share forecast range of US$7.85 to US$8.35 and said it expects revenue growth of between 8 per cent and 10 per cent in the fourth quarter.
The company, whose largest shareholder is Warren Buffett's Berkshire Hathaway Inc , has ramped up reward programs on its cards and struck partnership deals with a number of firms to counter competition from JPMorgan Chase & Co's Sapphire Reserve and Citigroup Inc's Prestige Card.
AmEx said foreign exchange adjusted proprietary card member spending rose 7 per cent in the third quarter, led by strong consumer growth in both the United States and international markets.
Net income rose to US$1.76 billion, or US$2.08 per share, in the quarter ended Sep 30, from US$1.65 billion, or US$1.88 per share, a year earlier, the company said.
Analysts had expected a profit of US$2.03 per share, according to IBES data from Refinitiv.
The company beat profit estimates for the seventh time in the last nine quarters, according to Refinitiv data.
Shares in AmEx, however, were 1.3 per cent lower as investors were disappointed that the company did not raise its guidance.
"I did not hear anything particularly worrisome on the conference call. However, the headline number was a 5 per cent beat, but the company did not raise its annual guidance," Stephen Biggar, director of financial institutions research at Argus Research, told Reuters.