American Express (NYSE:AXP) had a busy Friday. The credit card giant reported better-than-expected third-quarter earnings and nudged up the low end of its full-year profit outlook. But it also announced plans to cut about 5% of its global workforce, and that news, along with a hefty regulatory penalty, seemed to weigh on the stock.

Shares fell 1.67% to $319.75 at the time of publication Friday, according to market data.

Earnings Beat, Revenue Miss

For the third quarter, American Express reported revenue, net of interest expense, of $20.06 billion. That's up 9% from a year earlier but just shy of the $20.12 billion analyst consensus. Adjusted earnings came in at $4.68 per share, comfortably beating Wall Street's $4.48 estimate.

The quarter was fueled by higher Card Member spending, growing card balances, and stronger card fee revenue. Billed business, which tracks Card Member spending, rose 8% to $454 billion. Travel and entertainment spending jumped 10%.

By segment, U.S. Consumer Services revenue climbed 11% to $9.84 billion, while Commercial Services revenue rose 6% to $4.55 billion. International Card Services revenue increased 10% to $3.68 billion, and Global Merchant and Network Services revenue grew 6% to $2.08 billion. Net card fees were a bright spot, jumping 16% to $2.97 billion.

Costs Creep Up, Credit Holds Steady

Total expenses increased 9% to $14.55 billion, reflecting higher customer engagement costs tied to spending growth and the U.S. Platinum Card refresh. Provisions for credit losses fell to $1 billion from $1.3 billion a year earlier, helped by a reserve release that offset higher net write-offs. The net write-off rate improved to 1.8% from 1.9%.

But the company also faces a $350 million regulatory penalty related to anti-money-laundering deficiencies. Management said the enforcement actions would not affect its 2026 guidance or 2027 outlook.

3,500 Jobs on the Chopping Block

CEO Steve Squeri told Bloomberg on Friday that the company plans to eliminate about 3,500 jobs, representing roughly 5% of its global workforce. The restructuring aims to reduce management layers, simplify operations, and accelerate decision-making.

American Express recorded a $253 million after-tax restructuring charge. It also recognized a $751 million after-tax gain from selling its stake in Global Business Travel Group.

Consumers Keep Swiping

Squeri highlighted continued strength in customer spending, card acquisitions, retention, and credit quality. The company also expanded its premium card offerings through a partnership with Airbnb Inc. (ABNB). The agreement allows eligible luxury rentals booked through Amex Travel to qualify for Platinum cardholders' annual lodging credit.

During the earnings call, Squeri acknowledged that the anti-money-laundering deficiency cited by regulators should not have occurred. He said American Express would address the issue thoroughly and confirmed that the regulatory orders do not impose an asset cap.

CFO Christophe Le Caillec said customer spending patterns remained consistent with the past year, reflecting steady growth. He also pointed to strong early adoption of the new Graphite Card and said delinquency rates remained low and stable.

Guidance: A Slight Raise

American Express maintained its full-year revenue outlook of approximately $79.45 billion, representing about 10% annual growth. That forecast remains slightly below the analyst consensus estimate of $79.48 billion.

The company raised the lower end of its full-year earnings guidance to $17.60 per share from $17.30. The upper end remained unchanged at $17.90. The revised range compares with previous guidance of $17.30 to $17.90 per share and Wall Street's estimate of $17.63.

So the company is essentially saying: we're doing fine, but we're also trimming the sails. The layoffs and the regulatory penalty are the headline grabbers, even as the core business hums along. Investors, it seems, wanted a cleaner story.