American Express Global Commercial Services took in $3.4 billion in revenue net of interest expense during the third quarter, up 7 percent year over year. That continues a steady growth trend for Amex's corporate card division. However, some customers segments could slow down.
Net GCS income rose 4 percent to $629 million, despite an increase in expenses from $2.2 billion to $2.4 billion. Card-billed business for GCS grew from $121.6 billion to $127.3 billion. Corporate cards in force rose 3 percent to 14.8 million, while average quarterly cardmember spending ticked up 2 percent to $8,627.
Still, headwinds lurked in Amex's latest earnings report. GCS's share of overall company billings inched down to 41 percent after holding steady at 42 percent for the past three quarters. That decline was driven primarily by a 1 percent decrease in billed business in the large and global corporate card segment, on a foreign currency-adjusted basis. On the company's earnings call, CFO Jeffrey Campbell attributed that decline largely to "client-specific decreases" in spending from a few large clients. However, he noted "signs of caution in commercial spending trends, particularly among the larger corporations within our customer base."
However, small and midsize enterprise spending continued to grow robustly. U.S. SME billings rose 6 percent year over year in the third quarter, and international SME continued to be GCS's fastest-growing segment, as those billings increased 18 percent, adjusted for foreign currency.
Airline-related spend across Amex rose 2 percent year over year, adjusted for foreign currency. U.S. T&E-related billings rose 7 percent, the company reported.
Campbell said Amex's corporate credit card line revamp, which added several travel-centric rewards and included a new program for startups, would be a "terrific platform for growth." He noted, "For many of our customers, the corporate card is their first American Express product." He added that the company is exploring initiatives to encourage corporate card holders to add personal cards.
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