AmEx profit beats estimates as U.S. card holders spend more
American Express Co, the world's largest credit card issuer, reported a better-than-expected rise in quarterly profit, helped by higher spending by U.S. card holders and an increase in net interest income.
Net income attributable to AmEx shareholders rose to $1.51 billion, or $1.48 per share, for the first quarter ended March 31, from $1.42 billion, or $1.33 per share, a year earlier.
Analysts on average expected earnings of $1.37 per share, according to Thomson Reuters I/B/E/S.
Spending by U.S. holders of AmEx cards rose 7 percent in the quarter, boosting revenue in the business by 6 percent to $4.5 billion.
The company, which mostly issues its own cards unlike Visa Inc and Mastercard Inc, benefits from its largely affluent customers' consistent spending and low rates of default.
AmEx's net interest income rose 8.2 percent to $1.48 billion and provision for loan losses fell 13.4 percent to $420 million.
Total revenue, net of interest expense, however fell 2.7 percent to $7.95 billion, as the strong dollar hurt AmEx's international business.
The company's shares closed at $80.91 on Thursday on the New York Stock Exchange. The stock was down about 1 percent in extended trading.