(Reuters) -American Express kept its forecast for full-year profit unchanged on Friday, disappointing investors and overshadowing its quarterly results that topped estimates on record card member spending by its young and affluent customers.
AmEx shares fell 4.4% in premarket trading as the credit card giant reaffirmed its full-year 2023 per-share profit forecast of $11 to $11.40. Analysts on average expect $11.11 per share, according to Refinitiv.
While consumer spending on the company's cards touched a record high in the quarter, the lackluster forecast comes amid an uncertain economic environment that has seen lenders bolster rainy-day funds as a precautionary measure against defaults.
AmEx's total provisions for credit losses came in at $1.2 billion in the second quarter, compared with $410 million a year earlier.
Total network volumes climbed 8% to $426.6 billion in the second quarter ended June 30.
"Card member spending hit another all-time high, growing 8 percent on an FX-adjusted basis, driven by double-digit growth in U.S. Consumer and International Card Member spending," CEO Stephen Squeri said in a statement.
AmEx has so far been largely spared from the impact of rising prices for everything from energy to groceries as its young and well-heeled customer base carries on with shopping, dining out and travel.
The company said Millennial and Gen Z consumers remained its fastest-growing customer cohort, representing 60% of new consumer accounts acquired globally, while spending by the group increased 21% in the U.S. compared to a year earlier.
The credit card company reported a profit of $2.89 per share in the quarter, beating analysts' average expectation of $2.81 per share, according to IBES data from Refinitiv.
Total revenue, net of interest expense, rose 12% to $15.05 billion.
(Reporting by Manya Saini in Bengaluru; Editing by Anil D'Silva)
