American Express just reported third quarter earnings that missed expectations.
And now the stock is falling, dropping about 2% in after hours trade on Wednesday.
On Wednesday, the credit card company reported third quarter earnings per share of $US1.24, missing expectations for earnings of $US1.31 according to estimates from Bloomberg.
Revenue came in at $US8.2 billion, missing estimates for $US8.3 billion.
In a statement the company said, “Results for the quarter were significantly affected by higher spending on growth initiatives, earlier changes to certain renewed co-brand partnerships, and the stronger US dollar.”
American Express also slashed its outlook for the year, saying it sees full-year earnings per share coming in at $US5.20-$US5.35, below expectations for earnings of $US5.49 per share.
“Against the backdrop of a challenging environment and an uneven global economy, we continued to move forward with initiatives to build our business for the years ahead,” CEO Ken Chenault said in a statement.
American Express’ lucrative deal to be the exclusive credit card provider for wholesaler Costco is set to end next year, and in response Chenault said the company plans to invest, “substantially more in marketing, incentives and technology to attract a range of new Card Members and additional spending across our network.”
Chenault added that the company will expand card acceptance at an “accelerated pace” among small merchant and that it added Sam’s Club, Walmart’s wholesaling arm, to its network earlier this month.
Year-to-date, shares of the company are down about 17%.
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