(Reuters) -American Express beat estimates for second-quarter profit as its wealthy customers persisted in splurging on travel, dining and entertainment, the credit card giant said on Friday.
The company’s focus on a premium customer base has somewhat insulated it from weakness in the broader economy, even as rival lenders warn of tepid demand due to elevated borrowing costs.
“Increased scale, combined with our premium, high credit quality customers, our well-controlled expense base and our successful investments… fuels the earnings power of the core business,” CEO Stephen Squeri said in a statement.
AmEx’s profit was $3.02 billion, or $4.15 per share, for the three months ended June 30, 39% higher than a year earlier.
Excluding a one-time gain, the company earned $3.49 per share, higher than analysts’ estimate of $3.24 per share, according to LSEG data.
Shares of the New York-based company climbed 3.7% in premarket trading.
Its provisions for credit losses were $1.3 billion, versus $1.2 billion last year.
Last month, the company agreed to buy restaurant-booking platform Tock from Squarespace to expand its foothold in the dining industry.
The acquisition could support AmEx’s efforts within the small-and-medium-enterprise market, according to analysts.
AmEx views the segment as lucrative despite a recent slowdown in SME spending growth.
(Reporting by Niket Nishant in Bengaluru; Editing by Pooja Desai)
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