American Express reported third-quarter 2026 results on October 23, raising its full-year earnings guidance even as its stock slipped. Net card fees grew fastest among revenue lines, while a $400 million legal reserve increase tied to regulatory matters weighed on the quarter.
American Express raised its full-year earnings outlook after third-quarter diluted earnings per share rose 31% to $5.42. Total revenues net of interest expense reached $20.1 billion, up 9% from the prior year.
Shares nevertheless fell 1.73% to $319.53 after the release, as investors weighed regulatory concerns and a slight revenue miss.
Premium cards drive revenue growth
Net card fees rose 17% on an FX-adjusted basis to $3.0 billion, the fastest-growing revenue category, on higher average fees per card and a shift toward premium products. Net interest income increased 10% to $4.9 billion, outpacing 7% growth in total balances.
Gen-Z billed business grew 35% year over year in the U.S. Consumer Services segment, and the company acquired 3.1 million new proprietary cards, with 76% of new accounts opened on fee-paying products.
Legal reserves and restructuring weigh on results
The company added $400 million to legal reserves for regulatory matters, including an Office of the Comptroller of the Currency civil money penalty. It also booked a $336 million restructuring charge tied to a plan to cut approximately 5% of global workforce positions.
A $982 million pretax gain on the sale of its equity investment in Global Business Travel Group was partially offset by the restructuring charge. Excluding one-time items, adjusted diluted EPS was $4.68, up 13%.
Higher full-year guidance and shareholder returns
American Express now expects full-year 2026 reported diluted EPS of $18.30 to $18.60, up from prior guidance of $17.30 to $17.90. Revenue growth guidance stayed at 10%.
The company returned $2.2 billion to common shareholders in the quarter, split between $1.6 billion in share repurchases and $0.6 billion in dividends. Management expects net card fee growth to stay in the high teens in the fourth quarter.
Source: Investing.com
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