American Express (NYSE: AXP) reported strong third-quarter 2026 earnings on October 23, yet its stock fell sharply, making it the worst performer in the Dow Jones Industrial Average. The company announced a 5% workforce reduction, funded by a one-time gain from selling its stake in Global Business Travel Group (NYSE: GBTG). Despite the restructuring, management plans to use savings to return value to shareholders.
The earnings report highlighted record revenue of $20.1 billion, up 9% year-over-year, and diluted earnings per share (EPS) rose 31% to $5.42. Adjusted EPS, excluding the GBTG gain and restructuring charge, was $4.68, up 13% from the previous year. Total billed business grew 8% to $454 billion, with travel and entertainment spending leading the way, rising 10% on a foreign exchange-adjusted basis.
Card fees increased 16% to nearly $3 billion, reflecting growth in premium card portfolios. The company also raised its full-year 2026 EPS guidance to a range of $18.30 to $18.60 on a GAAP basis and $17.60 to $17.90 on an adjusted basis. CEO Stephen Squeri pointed to strength in billings, new acquisitions, and credit quality as reasons for the raised guidance.
The net write-off rate fell to 1.8% from 1.9% a year ago, indicating improving credit quality. However, the commercial segment saw slower growth, with billings rising just 3%, partly due to exits from the Lowe’s and Amazon small business co-branded portfolios. Investors may be selling on good news due to macroeconomic anxiety, despite the strong fundamentals.