American Express

October 20, 2011 by staff 

American ExpressAmerican Express, American Express Co. said Wednesday its third-quarter profit rose 13 percent as customers spent more on their cards.

For the three months ended September 30, the credit card company reported net income attributable to common shareholders of 1.24 billion, or 1.03 per share, compared with 1090 million, or 90 cents per share, in the year-ago period.

Revenue rose 9 percent to 7.57 billion and 6.97 billion years and the past.

Analysts on average expected earnings of 95 cents per share, on revenue of 7.58 billion and, according to data provided by FactSet.

New York, American Express, which has a rich customer base is less affected by the difficult economic situation, said user card spending rose 16 percent.

The average spending per card during the quarter was of 3,739 y.

In the U.S., revenues increased 6 percent to 3.8 billion. Internationally, revenue jumped 16 percent to 1.3 billion.

Meanwhile, the company obtained the lowest rate of delinquencies and defaults on the balances in the industry, reflecting the wealth of their clients and strict management of problem accounts Amex. The drop in delinquency and default in the past year allowed Amex to reduce the amount aside to pay bills in the quarter by 33 percent, and 249 million.

The increased use of American Express cards reflects a trend in the credit card industry, as consumers seek ways to maximize their spending by taking advantage of rewards programs. Rich rewards program American Express makes it attractive, especially since most of their clients also have cards from other brands.

In part due to increased depreciation rewards, Amex said its costs rose 13 percent to 5.6 billion y. The company reduced its marketing and promotion costs to partially offset the 24 percent jump in the cost of the rewards. Increased spending is an issue that someanlysts have raised as a concern.

President and CEO Kenneth Chenault said the growth in spending is expected to slow further for the rest of this year and into 2012.

American Express shares closed Wednesday up 55 cents to 46.13 y. Shares shed another 33 cents to 45.80 and trade aftermarket.

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