Amex's $18.30 to $18.60 range includes a $1.10 gain on a travel stake and a $0.37 restructuring charge. Exclude both and the guidance midpoint rose 15 cents, from $17.60 to $17.75.
American Express raised its profit guidance on Friday as it planned job cuts. Part of a one off gain is paying for the restructuring.
Amex's new full year guidance is $18.30 to $18.60 a share. That reported figure is lifted by the sale of its stake in Global Business Travel Group (GBTG). The company says part of that gain funded the restructuring. The underlying raise is only 15 cents at the midpoint.
Three earnings ranges to compare
The raise looks large or small depending on which of three ranges you compare. In July, Amex said it continued to expect full year earnings of $17.30 to $17.90 a share. On Friday its chief executive, Stephen Squeri, said the company was raising guidance to between $18.30 and $18.60, or $17.60 to $17.90 adjusted.
The release reconciles the two ranges. It takes out a $1.10 a share gain on the GBTG sale and adds back a $0.37 restructuring charge. Those net to 73 cents, and the ranges differ by 70 cents after rounding. Amex says adjusted earnings are a useful measure of ongoing operating performance.
July's midpoint was $17.60, and the adjusted midpoint is now $17.75. That is a 15 cent raise, or 0.9%. The reported midpoint of $18.45 looks like an 85 cent raise, but most of it is the gain.
The gain also inflates the growth rate that Amex implies for the year. Against $15.38 of reported earnings a share in 2025, the headline range implies 19% to 21% growth. On the adjusted basis it is 14% to 16%.
American Express kept its July midpoint of 17.60 dollars, raised the adjusted October midpoint to 17.75 dollars, and quotes a reported midpoint of 18.45 dollars that includes a net one off gain of about 0.70 dollars.
View data
| Guidance | Diluted EPS, dollars |
|---|---|
| July guidance midpoint | 17.6 |
| October adjusted midpoint | 17.75 |
| October reported midpoint | 18.45 |
What drove the quarter
Revenue net of interest expense reached $20.1 billion in the quarter, up 9%. The release credits higher Card Member spending, interest income on card balances and card fee growth.
Adjusted earnings a share rose 13% to $4.68, and credit stayed sound. Net write offs on card loans came in at 1.8%, down from 1.9%.
Billed business, a measure of transactions on cards and other products, fell short of expectations. It grew 8% to $454.0 billion, short of the $456.9 billion Bloomberg survey average. Amex said it had exited some small-business co-brand deals, which affected results. The shares were down 3.8% at $312.74 intraday at 11:37 am Eastern.
Two other things lifted the quarter. The tax rate fell to 18.1% from 24.1%, which the release attributes to discrete tax benefits. Those are one off items from prior period tax matters. Average diluted shares also fell 3%, to 674 million.
The tax change is the bigger of the two. Six points on Q3 pretax income of $4,531 million is roughly $270 million, or about 40 cents a share. That is rough arithmetic, because the release does not size the benefit.
That 40 cents is about three quarters of the 54 cent rise in adjusted earnings a share, from $4.14 to $4.68. So much of the quarter's growth did not come from selling more cards.
The gain itself was large. Amex booked $982 million before tax, or $751 million after tax, on selling its GBTG equity interest, a sale it had announced earlier. It is an investment gain, and the release does not call it cash from operations. Amex records it as a cut in operating expenses.
Expenses still rose 9% to $14.5 billion, even with the gain booked as a cut. The release blames higher variable customer engagement costs from more Card Member spending and the US Platinum Card refresh. Lower operating expenses partly offset that, as the gain outweighed higher legal reserves for previously disclosed matters and restructuring costs.
The cost of the job cuts
Amex is also cutting jobs. Reuters reported on Friday that it plans to eliminate about 5% of its global workforce. The 10-K put the workforce at about 76,800 at the end of 2025, so 5% is about 3,800 jobs by simple arithmetic.
The cut is nearer 3,500 jobs, because Squeri told Bloomberg TV that the base is 78,000. The third quarter carries a restructuring charge of $336 million before tax, $253 million after tax or $0.37 a share.
Spread over 3,500 to 3,800 jobs, that charge is about $88,000 to $96,000 a job. Those are the most it can imply per role, since the release does not itemise the charge.
The release gives no savings figure. The restructuring charge provides a benchmark for assessing the return. To win back $336 million in a year, the cut must save $336 million a year. After tax that is about 37 cents a share. Each $100 million saved beyond that adds about 11 cents a share, at the 25% tax rate the charge carried.
Revenue is growing, so the cut is not a response to falling sales. The release ties the restructuring to efficiency initiatives. The bet is that a premium card business can grow revenue without growing payroll as fast. Amex ranked first in the JD Power 2026 US credit card satisfaction study for the seventh year running. A cut of this size tests that streak.
Regulatory costs and the 2027 outlook
Amex also settled with US banking regulators on 8 October, a cost that sits outside the guidance. The parent company and a unit consented to a Federal Reserve order. Its bank consented to an order from the Office of the Comptroller of the Currency (OCC).
The bank agreed to a $350 million civil penalty payable to the OCC, part of it reserved earlier. The filing says the penalty does not affect 2026 guidance. It adds that the cost of meeting the orders is not expected to affect 2027 guidance.
Adjusted guidance is normal practice and provides a more useful base for comparison. The reported range flatters 2026 because the gain will not repeat. A 2027 forecast built on $18.30 to $18.60 would start about 73 cents too high. Growth should come off the adjusted $17.60 to $17.90.
The 2027 expense line has to absorb the missing gain and show the savings. If the savings arrive, operating leverage improves, meaning profit grows faster than revenue. If service slips, premium customers are the first to notice.
Amex reports fourth quarter results in late January if it follows this year's pattern. It reported on 30 January 2026, and that release should carry 2027 guidance. If guided 2027 expense growth runs below guided revenue growth, the cut is paying back. If expenses grow as fast as revenue, the benefit will have depended on a one time gain.