reported a 14% increase in third-quarter profits thanks mostly to brisk use of its charge card.
The financial services firm also announced a deal to help bail out
Delta Air Lines
, one of its longtime marketing partners.
In the quarter, the financial services firm earned $879 million, or 69 cents a share, compared with $770 million, or 59 cents a share, in the year-ago quarter. The company's earnings matched the Thomson Financial consensus estimate.
American Express' total revenue in the quarter also met Wall Street expectations, coming in at $7.2 billion, up 12% from a year ago. Revenue from the firm's charge card rose 14% to $2.5 billion, fueled by a sharp rise in customer spending.
"We are in an excellent competitive position and continue to generate broad-based growth in cardmember spending in the retail, everyday spending, travel and entertainment sectors," said Kenneth Chenault, the company's chairman and chief executive.
In a separate development, American Express announced it was providing a $100 million loan to cash-strapped Delta, as part of a new credit facility the airline is currently negotiating with other lenders. The charge company will also provide $500 million in the form of a prepayment on Delta's frequent-flyer miles program. Delta is trying to raise cash in a bid to avoid bankruptcy.
American Express and Delta have long had a deal to cobrand charge cards, as part of a joint marketing effort. The companies agreed to extend that relationship into the next decade.
In midafternoon trading following the earnings release, shares of American Express rose 8 cents to $51.81. The stock is a
Dow Jones Industrial Average
Delta Air Lines stock shot up 57 cents, or 18%, to $3.81.