American Express (NYSE:AXP) said on Thursday that it earned $1.25 billion during the third quarter, up 1.2% from $1.24 billion in the same period last year. EPS was $1.03, disappointing Wall Street, which had expected $1.09 a share, Dow Jones noted.

The credit card issuer recorded quarterly revenue of $7.86 billion, up 3.8% from 2011. That also narrowly missed analysts, who had forecast revenue of $7.9 billion.

Investors were not impressed by the results. Shares of American Express slid almost 3% in Thursday morning trading.

The company raised its loss reserves to $479 million, nearly double the $249 million it set aside to cover losses last year.

U.S.-based American Express cardholders spent 8% more with their credit cards, compared to last year. International cardholders increased their spending by 6%.

Earlier this month, American Express agreed to pay $27.5 million in fines and return $85 million to customers under a settlement with regulators relating to claims it misled customers with false advertising and conducted improper billing and collections.