American Express raises outlook after strong quarterly earnings

Credit card company American Express reported better-than-expected profits and revenue for its third quarter of 2016 on Wednesday, raising its outlook for the year as a result.

The New York-based firm said that it will also increase spending during the fourth quarter in order to capitalise on its strong performance in the third quarter.

American Express reported profits of $1.14bn, or $1.20 a share, down from $1.27 billion, or $1.24 a share, from the corresponding quarter last year.

Not including restructuring charges, earnings were flat at $1.24 per share, outperforming analyst expectations for 97 cents a share.

Its earnings guidance for 2017 is now at between $5.90 and $6 per share, having previously been estimated at between $5.40 and $5.70.

In afterhours trading, shares in American Express rose 5.6% as a result of the earnings report.

"While reported revenues were down 5 percent, we saw underlying revenue growth of 5 percent after adjusting for the absence of Costco-related business this quarter – slightly faster than comparable second-quarter levels," said chairman and chief executive Kenneth Chenault.