One of the leaders of the American market of plastic cards American Express (AmEx) said that its net profit in July-September 2020 decreased by 39% and amounted to $ 1.07 billion, or $ 1.3 per share, compared to $ 1.76 billion , or $ 2.08 per share, a year earlier. Experts gave forecasts at $ 1.34 per share.
The revenue of the financial company fell by 20% to $ 8.75 billion due to a decrease in card spending compared to the third quarter of last year amid the COVID-19 pandemic. The consensus revenue forecast was $ 8.66 billion.
In the past quarter, AmEx allocated $ 665 million to provisions for possible loan losses. Whereas last year this amount was $ 879 million.
The company’s current strategy is correct, even as revenue declines as a result of the coronavirus pandemic, said Stephen Squarey, chief executive of AmEx. There is also a positive trend in the volume of card spending in comparison with April this year.
AmEx shares lost 2.8% in preliminary trading on Friday. Since the beginning of the year, the company’s capitalization has dropped 15.8%, while the Dow Jones Industrial Average has dropped 0.6% over the period.