AmEx beats profit on higher card spending; expenses a worry
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FILE PHOTO: American Express logo and trading symbol are displayed on a screen at the New York Stock Exchange (NYSE) in New York, U.S., December 6, 2017. REUTERS/Brendan McDermid
(Reuters) – Credit card issuer American Express Co (AXP.N) beat analysts’ estimates for quarterly profit on Friday, as a healthy U.S. economy fueled higher spending by its customers.
Customer spending rose 7% in the United States, the company’s biggest market, and 5% globally in the second quarter.
U.S. consumer spending increased in May and April. Debit and credit card purchase volumes each rose 6% at Wells Fargo (WFC.N), which reported results last week, underscoring consumer confidence.
Total expenses, however, rose 9.2% as AmEx bolstered its rewards programs to attract more high-spending customers and counter competition from big bank rivals.
Shares of the company were down 1% premarket.
Net income rose to $1.76 billion, or $2.07 per share, in the quarter ended June 30, from $1.62 billion, or $1.84 per share, a year earlier, the company said. (reut.rs/32ys3vT)
Analysts had expected a profit of $2.04 per share, according to IBES data from Refinitiv.
Total revenue, excluding interest expense, rose 8.4% to $10.84 billion.
Reporting by Bharath Manjesh in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila