AmEx profit triples as spending rises
CHICAGO: American Express Co. tripled its second-quarter profit as more spending by its card members helped vault its business back to pre-recession levels.
The New York-based credit card company on Thursday registered its third consecutive quarterly gain since snapping a streak of eight straight quarters of falling profits dating to the start of the recession in late 2007.
The results, which exceeded Wall Street’s expectations, were further confirmation that the more affluent consumers and businesses that make up the Amex customer base are spending more freely as the economy slowly regains strength.
American Express earned $1.02 billion in the April-through-June quarter, or 84 cents per share, up from $337 million, or 9 cents per share, a year earlier.
Revenue was $6.9 billion, up 13 percent from $6.1 billion.
Analysts surveyed by Thomson Reuters were expecting earnings of 78 cents per share on sales of $6.8 billion.
American Express said card members’ spending climbed 16 percent. the largest increases came from corporate cards, cards issued by its bank partners and premium co-brand cards that people tend to pay off in full every month.
“While the economic environment remains uneven, our net income and billed business are back at or near their pre-recession levels,” Chairman and Chief Executive Kenneth Chenault said.
Some of the higher spending came from corporations and individuals shelling out more for airplane tickets, Chief Financial Officer Daniel Henry said on a conference call
