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American Express Profit Up as Cardholders Boost Spending

CNBC.com
Monday, 23 Jul 2007 | 4:55 PM ET

American Express, the fourth largest U.S. credit card company, said that second quarter profit rose, helped by rising spending by international and corporate cardholders.

Shares of American Express declined about 1 1/2 percent in after-market trading.

The New York-based credit card company posted second quarter profit of $1.057 billion, or 88 cents a share, from $945 million, or 76 cents a share a year earlier.

Analysts' average estimate of income before one-time items was 86 cents a share, according to Reuters Estimates. It was not immediately clear if those results were comparable to American Express' net income figure.

Revenue rose 9 percent to $7.13 billion, compared to analysts' average estimates of $7.54 billion.

Revenue net of interest expense in the company's international card and global commercial services unit rose 4 percent to $2.2 billion, reflecting higher spending by corporate and international card holders, as well as higher loan balances. Net income in that unit rose 22 percent to $277 million.

Total cards in force globally rose 10 percent to 82.2 million.

Credit card issuers including JPMorgan Chase and Capital One Financial last week reported rising write-offs of bad credit card loans for the second quarter compared to the same quarter last year, but credit losses are still at or below historical norms.

American Express' shares have risen more than 6 percent so far this year, while the Dow Jones U.S. Consumer Finance index has risen about 5 percent.

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