A sign with the American Express logo is seen outside a restaurant in Des Plaines, Illinois.
Justin Sullivan | Getty Images News | Getty Images
Credit card giant American Express Apple Inc. raised its full-year profit forecast on Friday, as its wealthy customers insisted on spending lavishly on travel, dining and entertainment.
The company also reported better-than-expected second-quarter earnings, underscoring the benefit it has gained from focusing on its premium customer base.
American Express's wealthy cardholders have been able to somewhat shield the company from weakness in the broader economy, even as rival lenders warn of weak demand due to higher borrowing costs.
“The increased volume, coupled with our high-quality, credit-positive customers, our well-controlled expense base and our successful investments… enhance the earnings power of the core business,” Chief Executive Stephen Squeri said in a statement.
The company expects 2024 earnings per share to be between $13.30 and $13.80, compared with the $12.65 to $13.15 range it had previously forecast. In the second quarter ended June 30, earnings were $3.02 billion, or $4.15 per share, up 39% from a year earlier.
Excluding a one-time gain from the sale of its fraud prevention technology unit, Accertify, the company earned $3.49 per share, above analysts' estimates of $3.24 per share, according to LSEG data.
Revenue rose 9% to a record $16.33 billion, but missed the London Stock Exchange Group’s estimate of $16.59 billion. Shares of the New York-based company fell 2% in premarket trading.
Last month, the company agreed to buy restaurant booking platform Tock from Squarespace to expand its foothold in the restaurant sector.
Analysts said the acquisition could boost American Express' efforts in the small and medium-sized business market.
American Express views the segment as profitable despite a recent slowdown in SMB spending growth.
