American Express Q3 earnings beat masked by one-off gain, job cuts

American Express’s Q3 earnings release on 23 October 2026 beat Wall Street’s profit forecast and came with an upgraded full-year outlook, yet the shares fell all the same. The gap between the headline numbers and what actually drove them is the real story here.

American Express (AXP) reported consolidated revenue net of interest expense of $20.1bn for the third quarter, up 9% year-on-year, fractionally short of the roughly $20.13bn analysts had pencilled in, according to Zacks. Adjusted earnings per share came in at $4.68, comfortably ahead of the roughly $4.48-4.50 consensus and up from $4.14 a year earlier, The Globe and Mail reported. On the strength of that, Amex lifted its 2026 profit guidance to $18.30-$18.60 per share on a reported basis, or $17.60-$17.90 adjusted, up from a prior range of $17.30-$17.90, Reuters reported.

The adjusted figure isn’t the full picture

Strip away the adjustments and reported, GAAP-basis diluted earnings per share were actually $5.42 – well above the $4.68 adjusted figure that made the headlines. That’s confirmed in the company’s own 10-Q filing, which shows net income of $3.712bn for the quarter. The reason the two numbers diverge so sharply is a $1.11-per-share gain from the sale of Amex’s stake in Global Business Travel Group, which flattered the reported figure, while legal reserves tied to a regulatory penalty and a restructuring charge worked the other way. Analysts and Amex itself strip out one-off items like the GBT gain precisely because they don’t reflect the underlying card business – which is why “adjusted EPS versus consensus” is the number that moved headlines, even though it is, by construction, the smaller of the two.

Why the shares fell on a beat

The other item working against the reported figure was a $336m restructuring charge tied to a decision to cut around 5% of Amex’s global workforce, part of a push to lean more heavily on artificial intelligence across the business. That announcement, landing alongside the earnings beat, is a large part of why the stock slid rather than rallied: Amex last traded at $313.06, down 3.07% on the day, having ranged between $300.15 and $325.55 over the prior 20 trading sessions. Trading volume ran about 30% above the 20-day average, suggesting investors were actively repositioning rather than simply shrugging off the print. Daily short-sale volume data from FINRA – the share of trading volume attributable to short sales, where traders borrow stock to sell it and profit if the price falls – showed no unusual build-up in the fortnight before results, running in a fairly ordinary 0.31-to-0.61 range, which points to the reaction being a response to the news itself rather than pre-positioned bearish bets unwinding.

The affluent customer is still spending

Set against the restructuring noise, the underlying card business looks healthy. Billed business – the total value of spending on Amex cards – rose 8% to $454bn in the quarter, driven by cardholders continuing to spend on travel, dining and shopping, The Globe and Mail noted. Credit quality also improved: provisions for credit losses fell to roughly $1.0bn from $1.3bn a year earlier, a reassuring signal given that the quarter played out against a softening US labour market, with unemployment ticking up to 4.2% in September from 4.1% the prior month, Federal Reserve data show. Amex’s closed-loop model – it issues cards and runs the payment network itself, rather than splitting the economics with a separate bank – means it captures more of that spending than card issuers that rely on outside banks, and its skew toward affluent, premium-fee cardholders has so far insulated it from the kind of belt-tightening showing up elsewhere in consumer credit.

Management is also leaning into partnerships to keep that premium customer locked in. The company detailed an exclusive tie-up with Airbnb bringing more than a million listings into Amex Travel, and said it is weaving OpenAI’s models into tools such as its Resy restaurant-booking platform, according to the earnings call transcript. Whether that investment, alongside the headcount reduction, translates into durable margin gains rather than one-off accounting noise is likely to be the question investors carry into the next few quarters, particularly as the 10-year Treasury yield sits at 5.13% – a backdrop that keeps funding costs for card issuers elevated even as spending holds up.

This article is for information only and is not investment advice or a recommendation to buy or sell any asset. Markets move quickly; figures are correct as sourced at the time of writing. Always do your own research before making financial decisions.