By Manya Saini
Oct 23 (Reuters) - American Express raised its 2026 profit forecast above Wall Street expectations on Friday after reporting strong third-quarter results, as a sharp increase in airline spending helped drive growth in its travel and entertainment business.
Airlines worldwide have raised ticket prices in recent months as they grapple with surging fuel prices stemming from the Middle East conflict and disruptions to global oil flows.
AmEx's travel and entertainment spending rose 10% in the
third quarter from a year earlier, led by a 13% jump in the airline category and a 9% rise in the restaurant category.
"Of course, there is some impact here from the average ticket size and airline price increases," Chief Financial Officer Christophe Le Caillec told Reuters in an interview, referring to the airline segment.
By targeting affluent consumers with high credit scores and more disposable income, the credit card giant has built a moat around its business to keep broader economic slowdowns and uncertainty at bay.
Billed business, a measure of total spending on all AmEx-issued cards, rose 8% in the third quarter to $454 billion. Revenue climbed 9% to $20.1 billion.
AmEx expects full-year adjusted profit in the range of $17.60 to $17.90 per share, with the mid-point well above estimates of $17.63, according to data compiled by LSEG.
The company has invested heavily in attracting younger consumers, particularly Gen Z and millennials, as it seeks to build long-term customer relationships and expand its global market share to sustain growth.
AmEx posted an adjusted profit $4.68 per share in the quarter ended September 30, sailing past Wall Street expectations of about $4.48.
The stock fell 1.3% in volatile premarket trading after the results. If the decline holds, it would mark the ninth time in 11 quarters that the stock has fallen despite results beating expectations, Truist analyst Brian Foran wrote in a note.
"Maybe we all work too hard, and the investor strategy is just short the quarter, long the rest," he added.
(Reporting by Manya Saini in Bengaluru; Editing by Devika Syamnath)
