American Express posted a sharp earnings spike that beat Wall Street expectations, as its customers resumed spending and fell less behind on paying their bills.
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American Express
The credit card company said it earned 84 cents per share in the second quarter, up significantly from 9 cents a share the same period last year.
Sales for the most recent quarter came in at $6.86 billion, against $6.09 billion a year ago.
American Express was seen reporting per-share earnings of 78 cents on revenue of $6.84 billion, according to a Thomson Reuters survey of 20 analysts who follow the company.
The stock, which finished the regular New York trading session nearly 5 percent higher at $43.19 a share , was last trading almost 2 percent lower after the bell. Get after-hour quotes for American Express here.
American Express Chief Executive Officer Kenneth I. Chenault noted that spending "improved across all segments," with the largest increase coming from corporate card users. But while spending has increased, most of its customers are borrowing less and paying their bills in full every month, the company also said.
As a result, American Express is earning less revenue from interest on existing credit card balances.
Its U.S. card services unit swung to a net profit of $522 million, compared with a loss of $153 million a year ago. The company put aside $519 million for loss provisions, less than half of its year-earlier provision.
American Express was one of the first big credit card lenders to start suffering big credit losses in 2008. But the company has climbed out of the recession more quickly than its rivals, in part because its customers are relatively wealthy and credit-worthy.