American Express Earnings: Spending Holds Up, but Read the Profit Adjustments

American Express’s latest results support a resilient spending story. They also show why the headline earnings growth rate is a poor substitute for reading the reconciliation.

The company reported on 23 October 2026, for the quarter ended 30 September. Reported diluted earnings per share increased 31% to $5.42. On the company’s adjusted basis, growth was 13% to $4.68.

Both figures are valid. They answer different questions.

The spending signal

Source: American Express’s SEC earnings release. Adjusted EPS is a non-GAAP measure.

Billed business is customer spending processed through the relevant card business; it is not the company’s revenue. Confusing the two would dramatically exaggerate the size of the operation.

Our reading is that the spending and revenue figures are the most useful starting point. They establish an operating foundation before investment gains, restructuring and changes in taxes complicate the profit comparison.

They should not, however, be treated as a representative survey of every household. A card company’s results reflect its own customer base, product mix and competitive position. A strong quarter here can coexist with financial pressure elsewhere in the economy.

The bridge from $5.42 to $4.68

The reconciliation removes an after-tax investment-sale gain of $1.11 per share, then adds back $0.37 per share of restructuring costs:

$5.42 − $1.11 + $0.37 = $4.68.

That adjustment is symmetrical: it removes both a benefit and an associated cost. It is more informative than presenting the gain as ordinary recurring earnings while overlooking the expense.

Adjusted earnings still require judgement. A restructuring charge may be unusual in a particular quarter, but restructuring can recur over a company’s life. Investors should ask whether exclusions remain exceptional over several years, rather than accepting the label automatically.

Equally, a disposal gain does not become worthless because it is excluded. It can create real value. The point is that selling an investment cannot normally be repeated each quarter to support the same earnings growth rate.

Credit quality belongs beside growth

The disclosed principal net write-off rate was 1.8%, versus 1.9% a year earlier. Provisions were $1.0bn, down from $1.3bn, with a reserve release contributing to the comparison.

A reserve release is not the same as customers making new purchases. It reflects changes in the allowance for expected losses. That is why a spending-led investment case should also track actual credit deterioration and the assumptions supporting provisions.

The risk is not that growth is automatically dangerous. It is that revenue can look healthy before weaker borrowers’ problems fully appear in reported losses. Looking at growth and credit quality together gives a more balanced picture.

Keep the guidance labels attached

Full-year guidance is $18.30–$18.60 GAAP EPS, or $17.60–$17.90 adjusted EPS. These are management forecasts, not achieved results.

Comparing adjusted quarterly earnings with reported annual guidance would mix two different bases. Any valuation exercise should use a consistent definition and make clear whether exceptional items are included.

The quarter’s encouraging feature is that the underlying business still grew after removing the large disposal benefit. The question for shareholders is whether spending, retention and credit performance can support that growth without an increasing reliance on accounting adjustments or heavier customer incentives.

Follow American Express’s stock page or read our guide to diversification before treating one company’s resilience as a view on an entire portfolio.

Figures are US dollars. Calculations and editorial interpretation are Compound’s. General information, not personal investment advice.

Photograph: Hassocks5489, 25 September 2018. American Express European Service Centre in Brighton, England. Original source; CC0 1.0. Archival photograph, not the earnings announcement. Resized display versions retain the source licence.