By ALEX VEIGA
American Express said Wednesday that its net income edged up 2 percent in the first quarter, as increased spending by cardholders helped boost revenue for the credit card issuer.
While the latest earnings came ahead of Wall Street expectations, revenue fell short.
Management also announced plans to raise its dividend in the next quarter by 15 percent to 23 cents per share, and it will return up to $3.2 billion to shareholders through share buybacks this year. It plans up to $1 billion more in buybacks in the first quarter of next year.The New York-based company said cardholder spending rose 6 percent during the quarter, or 7 percent, excluding the impact of foreign currency exchange. Annual cardholder membership fees also increased from a year earlier. "We are off to a strong start in 2013, thanks to our ability to grow revenue in a slow growth economy, control expenses and maintain a strong balance sheet," CEO Kenneth I. Chenault said in a statement. American Express cardholders tend to be more affluent than other credit card users, which was one reason the company has done well during the economy's slow rise out of the recession. Even so, credit card spending traditionally slows in the first three months of the year, as consumers focus on paying down cards after more spending during the holiday season. Sales at U.S. retailers declined a seasonally adjusted 0.4 percent in March. That followed a 1 percent gain in February and a 0.1 percent decline in January. Some of that decline may have been due to an increase in Social Security payroll taxes that went into effect in January and cut into many Americans' paychecks. Despite the payroll tax squeeze, American Express revenue for the quarter came in ahead of the same period last year.