American Express Profit Rises on Higher Card Holder Spending
American Express, the fourth largest U.S. credit-card company, said after U.S. markets closed Thursday that first-quarter profit rose, helped by higher card holder spending.
American Express has consistently increased profits in recent quarters by developing customer rewards systems that encourage spending without costing the company too much.
Credit losses were relatively low, with about 4.1% of credit card loans on the company's balance sheet written off on an annualized basis, up from 3.3% a year earlier.
The New York-based company said net income rose to $1.057 billion, or 88 cents a share, from $873 million, or 69 cents a share, in the year-ago period.
Analysts on average had expected earnings of 80 cents a share before one-time items, according to Thomson Financial.
Revenue, net of interest expense, rose 10%to $6.67 billion.
Total cards in force rose 10% to 79.9 million from last year's first quarter. Average basic cardmember spending rose 8% to $2,817.
Credit card issuers including JPMorgan Chase and Citigroup