American Express Company (NYSE: AXP) saw its shares fall on Friday, after it reported third-quarter net income of $1.1 billion, or $1.30 per share, compared with net income of $1.8 billion, or $2.08 per share, a year ago.
Third-quarter consolidated total revenues net of interest expense were $8.8 billion, down 20% from $11.0 billion a year ago. The quarter primarily reflected declines in Card Member spending and the average discount rate compared to the prior year.
Consolidated provisions for credit losses were $665 million, down 24% from $879 million a year ago. The decrease primarily reflected a modest reserve release and lower net write-offs. Total credit reserve levels at the end of the third quarter were generally consistent with second-quarter levels.
Net income plunged 39%, however, to $1.073 billion from the $1,755-billion figure in the prior-year.
Said CEO Stephen Squeri, "While our business continues to be significantly affected by the impacts of the pandemic, our third quarter results have increased our confidence that our strategy for managing through the current environment is the right one.
"Since the lows of mid-April, we have seen a steady recovery in our overall spending volumes. In fact, we had positive year-over-year growth in non-T&E spending, which has long accounted for the large majority of our overall volumes.
"While credit remains strong, with delinquencies and net write-offs at the lowest levels we have seen in a few years, we remain cautious about the direction of the pandemic and its impacts on the economy, which is reflected in our reserve levels."
AXP shares dropped $3.17, or 3% Friday to $101.62.
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