First-quarter profits at
rose 19% compared to a year ago, as the giant credit card company reported strong, higher spending by its customers.
In the quarter, AmEx earned $946 million, or 75 cents a share, compared to $794 million, or 61 cents a share, in the year ago period. Revenue in the quarter rose 10% to $7.57 billion.
Earnings and revenues were in line with analyst expectations. The Thomson Financial consensus estimate had AmEx earning 75 cents a share and generating $7.56 billion in revenue.
Expenses rose 9% to $6.2 billion, as the firm spent more money on marketing and promotions.
As is customary, AmEx, a component of the
Dow Jones Industrials
, reports its earnings during the middle of the trading day. The stock, which had been trading slightly lower earlier Tuesday, turned higher following the earnings announcement. In midafternoon trading, shares of AmEx rose 21 cents to $51.18.
"We generated record earnings again this quarter, driven by strong growth in our card businesses," said CEO Kenneth Chenault. "Spending on American Express cards rose among consumers, small businesses and corporate clients."
In the quarter, revenue at AmEx's travel-related services group, which includes its popular credit card, rose 11% to $5.6 billion. Discount revenue, which is the revenue from AmEx's credit card business, rose 13% to $2.67 billion, as the company card customers spent, on average, 10% more in the quarter.
Income from securitizations of customer loans rose 38% in the quarter to $316 million.
The travel services group is the single-largest division at AmEx, representing 85% of the company's first-quarter net income.
Earlier this year, AmEx announced a plan to spin off its financial planning arm. In the quarter, the financial advisers division reported a 5% gain in net income to $166 million. Revenue from financial planning activities rose 8%.