American Express CEO: Consumers are still spending
Squeri made the observation during American Express' earnings call
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Consumers are still spending, American Express CEO Stephen Squeri said, as inflation remains high and interest rates rise.
During an earnings call Friday morning, Squeri said American Express currently sees "no changes in the spending behaviors of our customers." He added that the credit card company’s "credit metrics continued to be strong with delinquencies and write-offs remaining at low levels even as loan balances are steadily rebuilding."
American Express currently sees "no changes in the spending behaviors of our customers," CEO Stephen Squeri said Friday during an earnings call. (REUTERS/Dado Ruvic/Illustration)
The company reported $13.56 billion in revenue and $1.88 billion in net income for the third quarter, up 24% and 3% respectively from the same period last year. Meanwhile, its provisions for credit losses was $778 million.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AXP | AMERICAN EXPRESS CO. | 270.19 | -2.50 | -0.92% |
Increases in spending in the goods and services and the travel and entertainment categories helped make overall card member spending soar 21% from the prior year, according to American Express. Its travel and entertainment spending posted a 57% jump year-over-year, the company said.
"Of course, we are mindful of the mixed signals in the broader economy," the CEO went on to say. "As always, we have plans in place to pivot should the operating environment change dramatically. And we've been taking thoughtful risk management actions to be prepared in the event of a downturn."
American Express reported $13.56 billion in revenue and $1.88 billion in net income for the third quarter, up 24% and 3% respectively from the same period last year. (Reuters/Lucy Nicholson/File Photo / Reuters Photos)
Inflation has been hovering near a 40-year-high, with the consumer price index in September rising 0.4% from August and 8.2% from the prior year, FOX Business previously reported.
The Federal Reserve has tried to wrestle it back down, approving three back-to-back 75-basis-point interest rate hikes already and potentially another next month. Concerns about the economy entering a recession have arisen amid the Fed’s massive rate increases.
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The U.S.’ gross domestic product, a broad measure of its economic activity, contracted during the first six months of the year.
Squeri reiterated later in the earnings call that American Express has plans in the event the economy falls into a recession.
American Express’ results both this quarter and this year show the "strength of our differentiated business model," according to CEO Stephen Squeri. (AP Photo/Jenny Kane)
"We’ve got our recession playbook, you have a credit cycle playbook, and we’ll pull that playbook lever if we need to pull it," he said. "But to pull it at this particular point in time, doesn’t make any sense."
"We’re seeing strong growth and we’re seeing strong credit results overall. So right now, nothing new," Squeri continued. "And the way I would headline this is that, this quarter looks like the first quarter, which looked like the second quarter, and it’s the third quarter. It’s another strong quarter for us."
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The CEO said he thinks American Express’ results both this quarter and this year show the "strength of our differentiated business model."