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Good Afternoon. On October 23, 2001, Apple introduced the iPod, promising space for 1,000 songs in a pocket. It wasn't the first digital music player, but making a useful product easier to carry helped change how people bought and enjoyed music.
Today, we're following the purchases that keep businesses growing. American Express reports more card spending, storage demand lifts Western Digital, and Britain's shoppers reveal how weather can move a retail season. The figures show where customers are spending, even when confidence feels harder to find.
—Rosie, Wyatt, Evan & Conor
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🔍 Today’s Vibe
🔥 What’s Hot: 🔥
Comfort Systems: The contractor's backlog grows to $17.81 billion in its latest quarter.
🥶 What’s Not: 🥶
Booz Allen: Quarterly revenue falls 3.9% despite a higher full-year earnings outlook.
🔢 Big number: $454 billion — American Express cardholders' third-quarter billed business, up 8% from a year earlier.
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🇺🇸 Stateside
An American Express card Photo credit
American Express charges ahead on spending
The cards are getting a workout. American Express reported $454 billion in third-quarter billed business, up 8% from a year earlier, as revenue net of interest expense rose 9% to $20.1 billion. It raised its full-year earnings outlook, though the headline profit increase needs a little unpacking.
The news: Reported earnings reached $5.42 a share, up 31%. Adjusted earnings, which exclude a business-travel investment sale gain net of restructuring costs, rose 13% to $4.68. Higher spending, interest income and card fees supported revenue. Credit-loss provisions fell to about $1 billion from $1.3 billion, reflecting a reserve release rather than last year's reserve build, partly offset by higher net write-offs.
What’s next: The company now expects full-year adjusted earnings of $17.60–$17.90 a share. Spending and credit costs remain useful checks on that outlook: a reserve release can help today's earnings, but it doesn't create a new purchase tomorrow. The reported and adjusted figures show why it's worth separating the customer business from a one-time investment gain.
Source: American Express
Consumers keep their guard up on prices
Growing card spending doesn't mean everyone feels comfortable spending it. The University of Michigan's final October consumer-sentiment index came in at 48.0, barely below September's 48.1. It was the survey's second-lowest final reading, despite an improvement from the preliminary October estimate.
The news: Persistent price pressure is weighing on how households see their finances. Consumers' year-ahead inflation expectation rose to 4.7%, from 4.6% in September. Expectations for inflation over the next five to ten years increased to 3.5% from 3.4%. Higher prices and borrowing costs leave shoppers with less room to feel good about the same purchase, even when they're still making it.
Big picture: Sentiment measures what people think, rather than tallying what they bought. That's why weak confidence can coexist with a strong card-company revenue report. The important distinction is between households maintaining purchases and households feeling able to absorb another increase in costs. October's final revision improved the immediate reading without erasing that longer-running strain.
Source: University of Michigan
Western Digital stores up stronger earnings
More data needs somewhere to live. Western Digital's fiscal first-quarter revenue climbed 55% to $4.38 billion, helped by greater storage shipments and better pricing. The quarter ended October 2; the company released the results after Thursday's market close.
The news: GAAP operating income reached $2.05 billion, up 158% from a year earlier. The gross margin expanded to 57.8%, compared with 43.5%, showing how much more of each sales dollar remained after production costs. Operating cash flow was $1.60 billion; subtracting capital spending left $1.38 billion in free cash flow. The storage supplier also increased its quarterly dividend to 17.5 cents a share.
Bottom line: Management's next-quarter revenue outlook centers on $5.1 billion, with the range implying growth of 66%–72% from the prior year. That forecast depends on demand and pricing continuing to support the business through its technology transitions. Today's margins demonstrate what stronger conditions delivered; the next quarter will show whether customers keep translating storage needs into orders at those economics.
Source: Western Digital
Booz Allen raises profit hopes despite shrinkage
Booz Allen Hamilton is improving earnings without a growing top line. Fiscal second-quarter revenue fell 3.9% to $2.78 billion, while net income increased 3.4% to $181 million. The government technology contractor raised its adjusted earnings outlook for the year.
The news: Revenue excluding billable expenses declined a smaller 0.8%, separating the company's own work from costs passed through to customers. Adjusted earnings rose 18.1% to $1.76 a share. Quarterly bookings were 1.5 times revenue, helping take total backlog to roughly $41 billion. That pipeline includes work with different funding and option conditions, so it isn't all immediate, guaranteed sales.
What’s next: Fiscal 2027 adjusted earnings guidance is now $6.50–$6.70 a share, above the previous $6.00–$6.35 range. Revenue guidance narrowed to $11.3–$11.6 billion. Turning that backlog into delivered work matters because stronger per-share profit hasn't yet been accompanied by quarterly sales growth. Cash conversion also deserves attention: free cash flow fell to $263 million, from $395 million a year earlier.
Source: Booz Allen Hamilton
Comfort Systems builds a much larger backlog
The equipment inside a building can be a growth business of its own. Comfort Systems USA, which installs heating, ventilation, air-conditioning and electrical systems, reported third-quarter revenue of $3.77 billion, compared with $2.45 billion a year earlier. Net income increased to $489 million, from $291.6 million.
The news: The contractor's backlog reached $17.81 billion at September's end, up from $14.06 billion three months earlier. Acquisitions don't explain most of the year-over-year increase: same-store backlog was $17.39 billion, compared with $9.38 billion a year earlier. Operating cash flow exceeded $1 billion for the quarter, giving another view of the work being converted into cash rather than just reported revenue.
Big picture: Backlog is a pipeline to execute, with people, equipment and scheduling required before it becomes completed work. Management expects continued organic growth and strong profitability through year-end and into 2027. The size of the pipeline supports that view, but maintaining cash collection and job execution will matter as the company takes on a substantially larger workload.
Source: Comfort Systems USA
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𝘐𝘯 𝘮𝘢𝘬𝘪𝘯𝘨 𝘢𝘯 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘥𝘦𝘤𝘪𝘴𝘪𝘰𝘯, 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘮𝘶𝘴𝘵 𝘳𝘦𝘭𝘺 𝘰𝘯 𝘵𝘩𝘦𝘪𝘳 𝘰𝘸𝘯 𝘦𝘹𝘢𝘮𝘪𝘯𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘪𝘴𝘴𝘶𝘦𝘳 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘵𝘦𝘳𝘮𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘰𝘧𝘧𝘦𝘳𝘪𝘯𝘨, 𝘪𝘯𝘤𝘭𝘶𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘮𝘦𝘳𝘪𝘵𝘴 𝘢𝘯𝘥 𝘳𝘪𝘴𝘬𝘴 𝘪𝘯𝘷𝘰𝘭𝘷𝘦𝘥. 𝘋𝘐𝘛 𝘈𝘨𝘛𝘦𝘤𝘩 𝘩𝘢𝘴 𝘧𝘪𝘭𝘦𝘥 𝘢 𝘍𝘰𝘳𝘮 𝘊 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦 𝘚𝘦𝘤𝘶𝘳𝘪𝘵𝘪𝘦𝘴 𝘢𝘯𝘥 𝘌𝘹𝘤𝘩𝘢𝘯𝘨𝘦 𝘊𝘰𝘮𝘮𝘪𝘴𝘴𝘪𝘰𝘯 𝘪𝘯 𝘤𝘰𝘯𝘯𝘦𝘤𝘵𝘪𝘰𝘯 𝘸𝘪𝘵𝘩 𝘪𝘵𝘴 𝘰𝘧𝘧𝘦𝘳𝘪𝘯𝘨, 𝘢 𝘤𝘰𝘱𝘺 𝘰𝘧 𝘸𝘩𝘪𝘤𝘩 𝘮𝘢𝘺 𝘣𝘦 𝘰𝘣𝘵𝘢𝘪𝘯𝘦𝘥 𝘩𝘦𝘳𝘦: https://bit.ly/4bzuWCi
🌎 Around The World
A London shopfront Photo credit
Britain’s shoppers end summer on a slowdown
Britain's retail quarter improved, then finished with a step back. Goods purchased in Great Britain rose 0.7% in the third quarter compared with the second, according to the first official estimate. September alone brought a 0.4% decline in sales volumes.
The news: Fuel sales recovered from a weaker spring, while warm weather helped food and beverage purchases over the quarter. The same warmth was less helpful when online clothing retailers rolled out autumn and winter ranges. Those sellers reported disappointing September demand; supermarket sales also fell after increases in July and August. August's total retail growth was revised up to 0.7%, from 0.5%, making the monthly comparison stronger than previously reported.
Bottom line: These are volume measures, so the quarterly rise reflects more goods bought rather than simply higher prices. The Office for National Statistics cautions that monthly figures are volatile. Taken together, the readings show a growing quarter with an uneven finish, leaving retailers to see whether cooler weather brings customers back to the seasonal items they postponed.
Source: Office for National Statistics
Safran gains altitude from engine maintenance
Keeping existing planes flying remains a valuable business. Safran's adjusted third-quarter revenue rose 14.7% to €9.00 billion, with growth across its three divisions. The French aerospace supplier said demand for civil-engine maintenance remained strong alongside the ramp-up in new engine production.
The news: Civil-engine spare-parts sales increased 17% in dollar terms, supported by pricing and better availability of parts. Services revenue rose 19%, including more business from contracts priced by flight hour. Safran delivered 535 LEAP engines during the quarter, up 5% from a year earlier. Its consolidated revenue, which uses different currency-accounting treatment from the adjusted measure, was €8.89 billion.
What’s next: Safran kept its full-year outlook, including €4.7–€4.9 billion in free cash flow. The plan still depends on production capacity, supply-chain performance and the timing of customer payments. A growing maintenance business brings income from aircraft already in service; meeting the new-engine delivery plan requires factories and suppliers to keep increasing output, too.
Source: Safran
Japan’s banks test their AI safety cushion
An AI investment boom can reach a bank's balance sheet without the bank building a single data center. The Bank of Japan's latest Financial System Report finds the country's financial system broadly stable, with banks able to withstand its severe stress scenarios. It also maps out how a reversal in AI expectations could travel through global finance.
The news: Large technology companies increasingly use bonds and long-term leases alongside their own cash to finance data centers. Private funds and other nonbank lenders help fill that funding need. If expected AI profits disappoint, those investors could adjust their portfolios and amplify market losses. Japanese banks have exposure through overseas lending and investment, even though lending to foreign funds and data centers remains a limited share of their overseas loan books.
Big picture: The report's stress test combines weaker AI expectations with higher oil prices and sharply higher interest rates. Banks retain sufficient capital and stable funding under that modeled shock. That's a resilience assessment, not a promise that losses can't occur; the central bank still calls for careful monitoring of lending quality and asset prices.
Source: Bank of Japan
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🥸 Dad Joke of the Day
Q: Why can’t you give Elsa a balloon?
A: Because she will let it go.
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📖 Vocab Word of the Day
Credit risk: The possibility that a borrower won't repay the money owed under the agreed terms, creating a loss for the lender.
In a sentence: American Express's credit-loss provisions help account for the credit risk in its card balances.
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