AXP American Express Company

By Robin Sidel and Anne Steele 

American Express Co. reported stronger-than-expected earnings and revenue for the third quarter and said it would aggressively pursue a series of initiatives in the fourth quarter, including an "extensive" advertising campaign and an increased emphasis on its platinum card.

The New York-based card company said the quarterly results are giving it fresh confidence to pump up investment spending during the upcoming holiday shopping season.

"There is clearly still a lot of work to do, but we are pleased with our results through the third quarter," said Chief Financial Officer Jeffrey Campbell in a conference call with analysts. Shares rose about 5% in after-hours trading.

AmEx also boosted its earnings guidance for 2017. The company said it now expects earnings, excluding restructuring charges, of $5.90 to $6 a share, up from its prior estimate for $5.40 to $5.70.

"Strong operating discipline and credit quality helped to keep us ahead" of the company's initial outlook, said Chief Executive Kenneth Chenault, said in a statement.

The results follow a difficult period for AmEx. The company has repeatedly fallen short of its revenue targets and has lost key partnerships, including a 16-year relationship with Costco Wholesale Corp.

Mr. Campbell warned that the company still faces challenges, including a slowdown in corporate spending and intense competition from rivals. At the same time, however, he said that credit trends are better than the company had expected several months ago.

In all, American Express reported a profit of $1.14 billion, or $1.20 a share, down from $1.27 billion, or $1.24 a share, a year earlier. Excluding restructuring charges, earnings were flat at $1.24 a share, beating analyst estimates for 97 cents a share, according to Thomson Reuters.

Revenue fell 5.1% to $7.78 billion. The top line increased 5%, however, excluding the impact of Costco-related revenue in the year earlier-period, reflecting a rise in card member spending, along with higher net interest income and net card fees.

The company, which earlier this year said it would cut $1 billion in costs, said its third-quarter expenses declined 3%.

In addition to the renewed emphasis on the platinum card and the ad campaign, Mr. Campbell said that the company will introduce new promotions for its "Small Business Saturday" event that encourages consumers to shop at small businesses on the Saturday after Thanksgiving.

"It will be a very active fourth quarter," Mr. Campbell said.

AmEx won a big legal victory last month when a federal appeals court tossed out an antitrust judgment against the company, ruling that it could keep barring merchants from steering customers to cards with lower merchant fees. The decision reversed a lower-court ruling that had determined AmEx's rules for merchants violated antitrust rules.

On the conference call, Mr. Campbell reminded analysts that the Justice Department, which brought the antitrust case against AmEx, has the right to appeal the most recent court decision.

Write to Robin Sidel at robin.sidel@wsj.com and Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

October 19, 2016 18:49 ET (22:49 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.