(Reuters) -American Express reported third-quarter profit above Wall Street estimates on Friday, benefiting from disciplined expense management that helped soften the hit from a decline in fees it earns from merchants.
Shares of the company fell 3.8% before the opening bell after gaining about 53% so far this year.
While the strength of the U.S. consumer remains relatively solid, elevated interest rates and economic uncertainty could discourage some customers from spending on non-essential purchases.
AmEx's discount revenue - the fee it earns from merchants for facilitating transactions - grew 4% to $8.78 billion in the quarter but was lower than the estimate of $8.85 billion, according to data compiled by LSEG.
However, the company has been able to outdo profit expectations in the past despite lower spending, thanks to its customers' excellent credit profiles that allow it to maintain low credit loss provisions.
The company's total expenses were $12.08 billion, lower than expectations of $12.74 billion.
Revenue rose 8% to $16.64 billion but was below expectations of $16.67 billion.
Its profit rose 2% to $2.51 billion for the three months ended Sept. 30. On a per-share basis, it earned $3.49 versus the $3.28 that analysts had forecast, according to estimates compiled by LSEG.
The company sees 2024 earnings per share between $13.75 and $14.05, higher than its prior expectation of $13.30 to $13.80.
"The strong early results we're seeing from our product refreshes reinforce my confidence that we're investing in the right areas," CEO Stephen Squeri said in a statement.