American Express shares gained after the company posted earnings that topped analysts' expectations, but missed revenue estimates.
The credit card company posted earnings of $2.10 on $8.24 billion in revenue compared to $1.42 a share in the year-earlier period on $8.28 billion in revenue. Its stock rose more than 2 percent after the bell.
Wall Street forecast earnings of $1.95 a share on revenue of $8.40 billion from the credit card company, according to a Thomson Reuters consensus estimate.
The Manhattan-based company attributed a 37 percent rise in quarterly profit to more customer spending and new cards issued across continents.
American Express' break from Costco Wholesale drove down expenses and made a portfolio sale of $1 billion. The card issuer
"Operating results were solid this quarter and consistent with the financial outlook we provided earlier in the year. We are making good progress on our initiatives to accelerate growth: acquiring 3 million new proprietary cards worldwide; generating additional spending on our global network; expanding merchant coverage; and continuing to meet the borrowing needs of Card Members while maintaining strong credit quality," said CEO Kenneth Chenault in a Wednesday release.
American Express forecast lower earnings for the back half of 2016 as the firm increases investments towards M&A, tech and infrastructure, said Jeffrey Campbell, chief financial officer, in an earnings call Wednesday. The guidance for 2017 of $5.60 earnings per share remains unchanged.
The firm returned a record $2.8 billion of capital to investors so far this year.
"During the quarter, we again made substantial investments in marketing and technology to help grow the business. At the same time, operating expenses continued to be well managed, and we moved forward aggressively with plans to take $1 billion out of our cost base on a run-rate basis by the end of 2017," Chenault said.