© Reuters. Pedestrians walk past an American Express sign in New York
(Reuters) – American Express Co (N 🙂 missed third quarter earnings estimates on Friday as its customers spent less during the COVID-19 economic downturn and set aside money for possible defaults, causing its stocks to fall 3%.
The COVID-19 pandemic sparked the worst economic downturn in decades, leading to mass layoffs, causing more people to fail to take their bills and providing more evidence that the economic recovery from the COVID-19 recession is stalling got.
The credit card issuer said provisions for consolidated losses for the third quarter ended September 30th were $ 665 million, down 24% year over year.
Quarter-end reserves were generally in line with the second quarter, AmEx added.
"While lending remains high and arrears and net write-offs are at their lowest levels in several years, we remain cautious about the direction of the pandemic and its impact on the economy, which is reflected in our reserves." Chief Executive Officer Stephen Squeri said.
According to Refinitiv's IBES data, the company saw earnings decline nearly 40% to $ 1.07 billion, or $ 1.30 per share, missing analysts' average estimates of $ 1.35 per share.
Total revenue excluding interest charges decreased 20% to $ 8.8 billion.
Net income for the global consumer services unit, which primarily issues a wide range of proprietary consumer cards worldwide, decreased approximately 14% to $ 855 million, driven by a decrease in spending and lower credit volumes.
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