American Express tops profit forecasts, raises 2026 outlook, plans 5% workforce cut

American Express reported third-quarter results on Friday that beat Wall Street's profit estimate and prompted the company to raise its full-year earnings guidance for the second time this year, even as it disclosed plans to cut roughly 5 percent of its global workforce as part of a broader restructuring.

The twin announcements -- stronger-than-expected earnings alongside job cuts -- extended an unusual pattern for the company: its stock has fallen in nine of the last eleven quarters despite beating analyst expectations each time, according to Truist Securities analyst Brian Foran, who flagged the streak after Friday's report. Shares slipped roughly 1.3 percent in premarket trading following the release, even as the company's own numbers improved across nearly every major category.

A beat, a raise, and a one-time gain

According to the earnings release American Express filed with the Securities and Exchange Commission, total revenue net of interest expense rose 9 percent year over year to $20.1 billion for the quarter ended September 30, roughly matching Wall Street's forecast. Adjusted earnings per share -- which strips out one-time items -- came in at $4.68, up 13 percent from a year earlier and above the roughly $4.48 that analysts polled by Reuters had expected.

Reported earnings per share under standard accounting rules were $5.42, up 31 percent, but that figure was inflated by a $982 million pretax gain tied to the sale of the company's remaining stake in Global Business Travel Group, the corporate travel-booking firm Amex spun off several years ago. Stripped of that gain and a separate restructuring charge, adjusted net income rose 11 percent to roughly $3.2 billion.

Card Member spending, measured as "billed business" in the company's regulatory filing, climbed 8 percent to $454.0 billion for the quarter. Travel and entertainment spending rose 10 percent, with airline spending up 13 percent and restaurant spending up 9 percent, according to figures the company reported. Credit quality continued to improve: provisions for credit losses fell to $1.0 billion from $1.3 billion a year earlier, and the net write-off rate -- the share of balances the company has given up collecting -- declined to 1.8 percent from 1.9 percent, helped in part by a reserve release.

On the strength of those results, the company raised its full-year 2026 guidance for adjusted earnings per share to a range of $17.60 to $17.90, up from a prior range of $17.30 to $17.90, with the new midpoint above the consensus estimate compiled by LSEG. Full-year GAAP earnings per share guidance was raised to $18.30 to $18.60, according to supplemental financial tables filed alongside the earnings release. Management said revenue remains on track to grow roughly 10 percent for a third consecutive year.

Thousands of jobs targeted in an "efficiency" push

The same filing disclosed a $336 million pretax restructuring charge -- $253 million after tax -- that the company attributed only to unspecified "efficiency initiatives," without detailing what the charge covered. Reuters, reporting on the results the same morning, said the restructuring includes a plan to eliminate about 5 percent of American Express's global workforce. The company did not disclose an exact headcount figure or timeline for the cuts in its public filings.

American Express has not yet filed an annual report for 2025, so its current global headcount is not precisely known, but its most recent annual report, filed with the SEC, put total employment at roughly 75,100 people as of the end of 2024, split between about 25,800 workers in the United States and 49,300 abroad. A 5 percent reduction against that base, if it held steady since then, would touch several thousand jobs, though the company has given no specifics about which divisions or geographies would be affected.

The restructuring lands at a moment when American Express has been investing heavily in rewards programs and card benefits aimed at younger, affluent customers -- spending the company has repeatedly cited as a driver of its billed-business growth even as rivals Visa and Mastercard, which do not carry lending risk on their own books, have generally posted steadier quarterly results.

Investors unmoved despite the numbers

Chief Financial Officer Christophe Le Caillec, discussing the deceleration in billed-business growth to 8 percent from stronger rates earlier in the year, pointed partly to pricing in one category of spending. "Of course, there is some impact here from the average ticket size and airline price increases," he said, according to Reuters' account of the earnings call.

Wall Street's muted reaction drew sharper commentary from outside analysts. Foran, of Truist, noted that Friday's dip would mark the ninth time in eleven quarters that the stock has fallen after a quarter in which the company beat expectations.

"Maybe we all work too hard, and the investor strategy is just short the quarter, long the rest."

That quote, attributed to Foran in Reuters' reporting, captured a broader skepticism that has weighed on the stock for more than two years: that reported beats have increasingly relied on lower tax rates, credit-reserve releases and share buybacks rather than on faster underlying growth in spending. Shares of American Express closed at $325.17 on Thursday and were trading several dollars lower before Friday's opening bell, leaving the stock up only modestly for the week and down roughly 12 percent so far this year, according to trading-data summaries reviewed after the report.

What comes next

American Express did not say Friday when the workforce reductions would take effect or whether they would be concentrated in specific business lines, such as technology, operations or customer service. The company's next scheduled disclosure of substance will be its fourth-quarter and full-year results in January, when investors will be watching both whether the restructuring produced the cost savings management is counting on and whether affluent-customer spending held up through the holiday shopping season.

The results also arrive in the final stretch before the Federal Reserve's next policy meeting, scheduled for October 27 and 28, where officials will weigh incoming economic data against a labor market that has shown signs of cooling -- a backdrop against which credit-card issuers' spending and delinquency figures are closely watched as a proxy for household financial health. For now, American Express's own numbers point to resilience among its typically higher-income customer base, even as the company moves to trim its own payroll.