American Express quarterly profit rises as U.S. card holders spend more
American Express Co, the world's largest credit card issuer, reported an 8.1 percent rise in quarterly profit due to higher spending by U.S. customers using its credit cards and a rise in its net interest income.
Spending by U.S. holders of AmEx cards rose 9 percent in the third quarter, boosting profit in the business by 14 percent.
The business accounted for nearly three-quarters of the company's profit.
U.S. consumer spending rose 0.5 percent in August after being unchanged in July, the Commerce Department said last month.
AmEx, which issues its own cards unlike Visa Inc and Mastercard Inc that work through banks, benefits from its largely affluent customer base and low rates of default.
However, single-digit growth in spending by its card users for about two years has pushed the company to launch products such as a fee-free card that targets a wider range of customers.
The company's net income rose to $1.48 billion, or $1.40 per share, in the quarter ended Sept. 30 from $1.37 billion, or $1.25 per share, a year earlier.
Net interest income rose 8.7 percent to $1.4 billion.
However, total revenue, net of interest expense, remained nearly unchanged at $8.33 billion.
Chief Executive Kenneth Chenault said AmEx's revenue was growing at a pace below the company's long-term target. "While the economy is stronger, it is not growing as fast or as steadily as most people would like," he said in a statement.
Analysts on average had expected a profit of $1.36 per share and revenue of $8.35 billion, according to Thomson Reuters I/B/E/S.
AmEx's shares closed at $80.93 on the New York Stock Exchange on Wednesday.