• AXP shares fall 5% as earnings weaken in the third quarter.
• Full-year revenue guidance directed to the lower end of the previous range.
• American Express beat the consensus earnings estimate by $0.20.
• Credit provisions and write-offs escalate moderately in the third quarter.

American Express (AXP) the company’s shares fell more than 5% on Friday after the release of third-quarter results. The company lowered its revenue forecast for the entire year from 9-11% to the lower end of this range, which disturbed the market sentiment.

Despite announcing consensus third-quarter earnings on Friday and raising full-year earnings estimates, AXP stock immediately sold off.

The Dow Jones Industrial Average (DJIA)of which American Express is a part, has increased slightly at the time of writing, while the NASDAQ index has gained 0.76%.

American Express Earnings News

The credit card issuer’s revenue grew about 8% year-over-year in the third quarter, with billings reaching $387.3 billion.

“Based on our performance to date and the forceful earnings generated by our core businesses, we are raising our full-year EPS guidance to $13.75-$14.05 compared to the consensus of $13.28, up from the previous $13.30-$13.80 USD,” said the New York-based company.

The higher year-over-year revenues are driven by growth in loan volumes, higher net interest income, stable customer spending and accelerated commission growth.

American Express added 3.3 million fresh card users in the quarter and said it saw significant growth in premium credit card customers. Credit to card members grew from $118 billion a year ago to $134.5 billion last quarter.

The provision for loan losses increased from $1.23 billion in the year-ago quarter to $1.36 billion in the third quarter. Write-offs increased to 2.2% from 2% a year earlier. However, in the second quarter it was 2.4%.

American Express Stock Forecast

On Thursday, AXP shares hit an all-time high. But that all happened on Friday, when shares fell sharply at the opening. The stock initially fell through the upper line of the price channel that began in April. American Express stock originally broke out of this channel in mid-September.

However, price action has largely returned above the trendline, so it may act as support. In fact, Q3 results weren’t feeble at all, so AXP may consolidate here before finding fresh buyers.

AXP stock daily chart