American Express told analysts on Friday that it now expects 2026 earnings of $18.30 to $18.60 a share, up from $17.30 to $17.90 in July, and that it will eliminate about 5% of its workforce for a $336 million restructuring charge. The stock still fell roughly 4%. The company’s own earnings release shows why: most of the raise is a one-time gain from selling a travel-business stake, and the quarter’s 13% adjusted earnings growth leans on a tax rate about seven points below last year’s. Take out the gain, the charge and the tax help, and pretax income rose 1.6%.
The Raise Is Mostly a Stake Sale
The new range is a reported figure. It includes a $1.10 per share after-tax gain on the sale of Amex’s equity interest in Global Business Travel Group and a $0.37 per share after-tax restructuring charge, according to the reconciliation at the back of the release. The July release said Amex continued to expect $17.30 to $17.90 and mentioned neither item. Lined up on the same footing, the two ranges look like this:
| Full-year 2026 EPS | Low | High | Midpoint |
|---|---|---|---|
| July guidance | $17.30 | $17.90 | $17.60 |
| October guidance, as reported | $18.30 | $18.60 | $18.45 |
| Less: stake-sale gain, after tax | -$1.10 | -$1.10 | -$1.10 |
| Plus: restructuring charge, after tax | $0.37 | $0.37 | $0.37 |
| October guidance, adjusted | $17.60 | $17.90 | $17.75 |
The reported midpoint rose 85 cents. The gain net of the charge is 73 cents (1.10 minus 0.37), which is 86% of the increase. On the adjusted basis the midpoint moved 15 cents, or 0.9%, and the top of the range is still July’s $17.90. Only the floor came up. That is a modest raise on operations and a large one on accounting, and the stock’s drop fits the modest reading.
The Beat Came Through the Tax Line
Adjusted earnings of $4.68 a share beat the $4.48 average analyst estimate that CNBC cites from LSEG, and rose 13% from $4.14. Revenue of $20.06 billion, up 9%, landed slightly under the $20.12 billion forecast.
The release makes it possible to rebuild the quarter. Reported pretax income was $4.531 billion, which includes the $982 million gain and the $336 million charge. Remove both and it is about $3.885 billion, against $3.825 billion a year ago: up 1.6%. Adjusted net income was $3.214 billion, up 11%, so the gap between 1.6% and 11% is tax. The release gives the effective tax rate as 18.1% against 24.1%, “primarily reflecting discrete tax benefits” from resolving prior-period tax items. On the adjusted figures the implied rate is 17.3% ($3.885 billion less $3.214 billion leaves $671 million of tax).
Here is the exercise. Charge the adjusted pretax income at last year’s 24.1% and net income comes to about $2.949 billion, $265 million less than reported. Spread over 674 million diluted shares, that is roughly 39 cents, and adjusted EPS lands near $4.29, 19 cents under the consensus. It is our arithmetic, not a restatement, and analysts may have modeled part of the tax benefit. A 3% drop in the diluted share count, from 693 million to 674 million, supplies much of the rest of the growth, and provisions for credit losses fell to $1.0 billion from $1.3 billion on a reserve release the company names.
A 5% Cut at About $87,000 a Role
CNBC reports that Amex had almost 77,000 employees at the end of 2025, so 5% is roughly 3,850 people. Dividing the $336 million pretax charge by that gives about $87,000 a role, or about $66,000 after tax on the $253 million net cost. The charge equals 34% of the $982 million gain, and Chief Financial Officer Christophe Le Caillec told CNBC that part of the sale proceeds went into the plan. After the charge, about $646 million of the gain is left over before tax.
The AI framing deserves less weight than the headline gives it. Le Caillec’s own description was that the company is cutting layers and widening spans of control “so that we can automate and take advantage of AI in the coming quarters and the coming years.” That is a management trim with automation as the stated next step, and no automation saving appears in the numbers yet. It is also part of a pattern: CNBC notes Barclays confirmed about 5,000 cuts, also roughly 5% of its staff, the day before, and BTN covered Intuit’s $340 million charge for a 17% cut in May. Against those, Amex’s 5% is the gentle version.
What the Fourth Quarter Has to Show
Nine-month adjusted EPS is $13.49. The adjusted full-year range of $17.60 to $17.90 therefore implies $4.11 to $4.41 for the fourth quarter, below this quarter’s $4.68 and 16% to 25% above the $3.53 Amex earned a year earlier (15.38 minus 11.85). To get there, pretax growth has to speed up from 1.6%, or the tax rate and the buyback have to keep helping. The January report will show which one it was, and until then the sensible read of this quarter is a card business growing revenue 9% with a bottom line flattered by one-time items.