Updated from Thursday, April 23

American Express ( AXP) on late Thursday reported its first-quarter profit plunged by more than half compared to a year earlier, but soared past the consensus analyst expectation.

The credit card company said in a release issued after the markets closed that net income totaled $437 million in the first three months of the year vs. $991 million in the year-earlier period.

Net income attributable to common shareholders totaled $361 million vs. $985 million a year earlier. It accounts for dividends American Express paid to the U.S. Treasury on its preferred investment as well as a $72 million related gain and other ancillary adjustments in the quarter and prior year.

Earnings from continuing operations attributable to shareholders was 32 cents a share vs. 89 cents a share a year earlier.

Analysts had expected the company to make 12 cents a share.

Revenue fell 18% to $5.9 billion as consumers and businesses reined in their spending habits during the weakened economy.

Average cardmember spending fell 16% to $2,391 during the quarter from $2,838 in the year earlier period, the company said.

American Express took a $1.8 billion provision to offset the rising amount of bad loans amid the weakened consumer environment, primarily in its U.S. revolving card business, it said.

"While we did see some recent improvement in early delinquency rates, overall credit indicators reflected rising unemployment levels and the broad-scale weakness in the economy," chairman and CEO Ken Chenault said in a statement.

CFO Dan Henry said during the company's conference call late Thursday that even though the housing downturn was a primary driver of higher delinquencies and charge-offs early in the cycle, at this point, "I really think that unemployment has taken over," as the primary driver of card losses.

A stabilization in the housing market, combined with increasing consumer confidence, are among the factors that make Henry believe "you'll really start to see some notable improvement."

American Express' net loan write-offs in its U.S. business were 8.5% on a managed basis (8.2% for the overall firm), up from 6.7% in the fourth quarter and 4.3% in the year-earlier period.

The company expects managed write-offs in its U.S. lending business to rise between 200 and 250 basis points in the second quarter and an additional 50 basis points in the third quarter, before leveling off in the fourth quarter if unemployment reaches 9.7% in December.

"We continue to be very cautious about the economic outlook and plan to initiate additional reengineering efforts in the second quarter to help further reduce our operating costs," Chenault said. "Our goal is to remain in a position to generate profits in excess of our dividend and be able to take competitive advantage of opportunities as the economy begins to rebound."

Chenault also said the company plans to repay the government's TARP investment "if permitted by our supervisors" and "if supported by the results of the stress assessment."

President Barack Obama is pushing for tougher consumer credit card protections. Obama met with leaders of the major credit card issuers including Bank of America ( BAC), Citigroup ( C), American Express, Wells Fargo ( WFC), JPMorgan Chase ( JPM), Capital One ( COF) as well as executives from Visa ( V) and MasterCard ( MA) at the White House on Thursday.

"We certainly take very seriously the concerns about the industry and look to work constructively with the administration and Congress towards a productive solution," Henry said on the call. "While we are mindful of the calls of reform, we think it's important to look at all things and strike the right balance between consumer protection and availability of credit to the consumer population."

He did not provide any updated information regarding Thursday's White House meeting with executives of card issuing businesses.

American Express shares were rising 12.6% to $23.62 Friday morning.

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