Higher spending by corporate cardholders and strong billing growth among non-U.S. small businesses helped drive increased earnings for American Express Global Commercial Services during the third quarter.
Card-billed business for Amex GCS, the division that operates the company's corporate card programs, was $122 billion, up a strong 12 percent year over year, adjusted for foreign currency.
GCS reported net income of $606 million, up 20 percent from $505 million from a year ago, while cards in force for the division jumped 4 percent to 14.4 million, according to Amex. Average quarterly cardmember spend also increased 7 percent to $8,469.
Total GCS expenses were $2.2 billion, up 10 percent year over year, an increase Amex attributed to rewards and other cardholder engagement costs.
GCS comprised 41 percent of Amex's overall card billings during the quarter. Among GCS billings, the international small and midsize enterprise segment, defined as companies with less than $300 million in annual revenue, was particularly robust. Billings for that segment rose 23 percent, adjusted for foreign currency.
"International SME remains our highest-growth customer segment," Amex CFO Jeff Campbell said. "Our growth in this segment has accelerated significantly in the last year, and we continue to believe that we have a long runway for growth, given the low penetration we see in the top countries that we offer international small business products."
Companywide, American Express earned a third-quarter net income of $1.7 billion, up 22 percent from $1.4 billion a year ago.
Worldwide airline-related spending across all product types was up 9 percent year over year during the third quarter, adjusted for foreign currency, while U.S. T&E-related billings increased 8 percent. Revenue net of interest expense reached a record $10.1 billion—beating out last quarter's then-record $10 billion.
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