Net Jumps at American Express

Charge-card spending and balances both run higher.
Publish date:

Charge-card giant

American Express

(AXP) - Get Report

on Monday reported a 15.7% gain in second-quarter profit, fueled by strong consumer and business spending.

In the quarter, the New York financial services firm earned $1 billion, or 81 cents a share, compared with $876 million, or 68 cents a share, a year ago. Revenue at AmEx rose 11% to $8 billion.

The company beat the Thomson Financial consensus earnings estimate by 3 cents. Revenues also came in ahead of the consensus forecast of $7.78 billion.

Earnings growth was driven by an 18% surge in card-member spending, which resulted in a 16% gain in "discount" revenue (the charge-card margin) to $2.9 billion. Net finance charge revenue rose 14% to $637 million, the result of larger customer balances in the quarter.

"Strong momentum in our card business and excellent credit quality drove another quarter of record earnings," said AmEx Chairman and CEO Kenneth Chenault, in a prepared statement.

Shares of AmEx, which released its earning report at 1:30 p.m. EDT, were recently trading around $55.20, up 63 cents, or 1.2%.