Global markets, explained fast.

American Express Beat Earnings and Raised Its Forecast — So Why Did the Stock Fall? The 5% Job-Cut Plan Explained

2026-10-23

American ExpressAXPearningsstocks


American Express Beat Earnings and Raised Its Forecast — So Why Did the Stock Fall? The 5% Job-Cut Plan Explained

American Express beat third-quarter profit expectations and raised its full-year profit forecast on Friday, October 23, 2026 — yet its shares fell about 3% in premarket trading after the company said it will cut roughly 5% of its global workforce.

The Direct Answer

What happened? American Express (NYSE: AXP) reported adjusted earnings of $4.68 per share, beating Wall Street's $4.50 expectation, on record revenue of $20.06 billion, up about 9% year over year. It raised its full-year GAAP profit forecast to $18.30 to $18.60 per share, from $17.30 to $17.90 previously.

Why did the stock fall? On the earnings call, CEO Stephen Squeri said the company took a $336 million restructuring charge in the quarter for a plan expected to eliminate around 5% of global positions — roughly 3,800 roles. Shares fell 2.4% to $317.52 in premarket trading according to Barron's, and 2.9% to $315.80 according to the Wall Street Journal, after closing Thursday at $325.17.

What Happened in the Quarter?

The underlying business looked strong. Billed business — total spending on AmEx-issued cards — rose 8% to $454 billion in the quarter ended September 30, as affluent customers kept spending on travel, dining and shopping, Reuters reported. Revenue climbed 9% to $20.1 billion, although that was slightly below the $20.12 billion consensus cited by FactSet.

On a GAAP basis, net income rose to $3.7 billion, or $5.42 per share, from $2.90 billion, or $4.14 per share, a year earlier. Adjusted earnings of $4.68 per share were up 13% year over year and exclude a gain from selling the company's stake in Global Business Travel Group. Credit quality also improved: consolidated provisions for credit losses fell to $1 billion, from $1.3 billion a year ago.

"Business momentum continues, with strength in billings, new acquisitions and Card Member retention, and excellent credit quality," Squeri said in the results statement.

Why Is It Blowing Up?

The surprise was not the earnings — it was the restructuring. A company reporting record revenue and raising guidance does not usually announce it is cutting one in twenty jobs on the same morning. That contrast is why the story spread quickly across finance coverage within an hour of the call.

Squeri framed the cuts as a speed and efficiency move, not a demand problem. "We've got good momentum, but to accelerate innovation and win over the next few years we need to become a more agile and efficient organization," he told analysts. "When completed, we believe this exercise will help us operate and execute more effectively and give us greater capacity to invest in our business priorities."

The Wall Street Journal reported the cuts will affect roughly 3,800 roles, based on the 76,800 people American Express employed at the end of last year in its latest annual filing, and that the plan is aimed at reducing layers and speeding up decision-making.

Why Did Investors Sell First?

Three things explain the premarket drop better than the headline beat. First, the $336 million restructuring charge is a real cost landing now, tied to a plan whose savings are not yet proven. Second, revenue slightly missed consensus, even as profit beat — a mix that often invites profit-taking. Third, the stock had already run up into the print: shares had risen about 7% since closing at $302.09 on October 1 and reclaimed their 50-day moving average, even though they were still down about 12% for the year at Thursday's close.

The guidance picture was also two-layered, which took time to parse. The GAAP forecast rose to $18.30 to $18.60 per share, helped by the Global Business Travel stake sale, part of which the company is reinvesting in the restructuring. Adjusted guidance — excluding the sale and restructuring effects — was narrowed to $17.60 to $17.90 per share, from $17.30 to $17.90, and the company said it remains on track for full-year revenue growth of 10%.

The Bigger Signal: Affluent Spending Is Still Holding

Investors watch American Express closely because its mostly affluent cardholders are an early read on discretionary spending. Friday's numbers said that spending is still resilient despite higher interest rates and sticky inflation: billings up 8%, retention strong, and lower credit-loss provisions. Reuters noted bank executives earlier this month also highlighted consumer resilience and stable credit metrics. AmEx has also kept investing in premium perks — on Thursday it announced an exclusive Airbnb partnership bringing more than one million listings to Amex Travel, a move Morgan Stanley called an incremental positive for its Platinum strategy.

What's Next?

The next questions are concrete: which teams lose roles under the 5% plan, how quickly the restructuring is completed, and whether the promised reinvestment shows up in new cardmember perks and products rather than just lower costs. For the stock, investors will watch whether the guidance raise and strong billings outweigh the restructuring cost once regular trading settles. This article reports what happened and why markets reacted; it is not a recommendation to buy, sell or hold any security.

FAQ

Why did American Express stock fall after beating earnings?
Shares fell about 2.4% to 2.9% premarket after the company announced a $336 million restructuring charge and a plan to cut about 5% of its global workforce, and revenue of $20.06 billion slightly missed the $20.12 billion consensus.

How many jobs is American Express cutting?
About 5% of its global workforce — roughly 3,800 roles, based on the 76,800 employees reported at the end of last year.

What were American Express Q3 2026 results?
Adjusted EPS was $4.68, beating the $4.50 expectation; GAAP EPS was $5.42 on net income of $3.7 billion; revenue rose about 9% to $20.06 billion and billed business rose 8% to $454 billion.

What is American Express's new 2026 profit forecast?
GAAP EPS guidance was raised to $18.30 to $18.60 per share, from $17.30 to $17.90; adjusted EPS guidance was narrowed to $17.60 to $17.90, with revenue growth of 10% still expected.

Sources