on late Thursday beat analysts' first quarter estimates, fueled by increased spending from customers abroad, despite lower profits hit by the ongoing credit crisis at home.
The New York-based card services and travel company made $991 million, or 85 cents a share, down 6% compared to $1.05 billion, or 87 cents a share, in the year-earlier period. Income from continuing operations, which excludes the recent
of its private bank, dropped 11% to $974 million, or 84 cents a share. Revenue, net of interest expense, rose 11% to $7.2 billion, the company said.
Analysts were expecting the company would make 81 cents a share on $7.2 billion of revenue, according to Thomson Financial.
"We delivered stronger than expected revenue growth this quarter, despite a weak and uncertain U.S. economy," Chairman and CEO Kenneth Chenault said in a statement. "Business volume growth was in the top tier of the industry, as we realized continuing returns on our multi-year investments and benefited from a diverse consumer and business-to-business portfolio. Cardmember spending rose 14%, driven by spending in the international markets, among bank partners and in the corporate sector.
"While we continue to be cautious about the U.S. economy, we are encouraged by our performance internationally," Chenault continued. "And, based on the breadth and flexibility of our business model, we remain on track for the 4% to 6% EPS growth that we indicated at the start of the year, barring significant deterioration in the economic environment."
The company's provision for losses in its U.S. card services unit, spiked 52% to $881 million. Amex's total provision for the quarter was $1.2 billion.
, which earn money off electronic transactions, American Express has exposure to the credit crisis because it keeps loans on its books.
"Loan growth slowed from the rate of recent quarters, reflecting in part credit-related actions such as targeted line reductions," Chenault said. "Similarly, loan loss reserves rose in light of the increase in delinquencies and writeoffs, particularly in those areas hit hardest by the U.S. housing market. In managing our risk profile, we are aiming to balance the challenges of what continues to be a difficult environment against longer-term growth opportunities in the payments sector."
Separately, American Express recognized $70 million, or $43 million after tax, for the previously announced Visa settlement. American Express had sued Visa, MasterCard and banks such as
Bank of America
, for allegedly blocking it from entering the bank-issued credit card business.
Shares were up 4.3% to $47.12 in recent after-hours trading.