By Daniel Huang And Tess Stynes
American Express Co.'s first-quarter earnings rose 6.5% thanks
to higher card member spending and loans, though foreign-currency
impacts dented revenue.
Earnings beat the expectations of Wall Street analysts, but
revenue was light. Shares edged down 1.1% after hours as the
company said its results were hurt by the significant impact of a
stronger U.S. dollar on its international operations.
Card member spending increased 3% globally, or 7% when adjusted
for currency impacts.
The results came after a quarter filled with setbacks, the most
notable of which were the end of the New York credit-card firm's
partnership with Costco Wholesale Corp. and the loss of an
antitrust lawsuit.
In all, American Express reported a profit of $1.53 billion, or
$1.48 a share, compared with $1.43 billion, or $1.33 a share, a
year earlier.
Revenue, net of interest expense, was $7.95 billion, down 2.7%
from $8.17 billion a year earlier. The top line rose 1% adjusted
for currency impacts and 5% when also adjusted to exclude the
business travel operations that were part of the company a year
ago.
Analysts polled by Thomson Reuters had expected earnings of
$1.37 a share on $8.2 billion in revenue.
The company's U.S. card service business reported that its
earnings increased 7% to $934 million, while revenue, net of
interest expense, increased 6% to $4.5 billion.
Provisions for losses totaled $420 million, down 13% from a year
earlier, and American Express said credit indicators continued to
be at historically strong levels.
Struggling in recent months to keep up with its longtime
revenue-growth target of 8%, the company had focused instead on
cost-cutting, including announcing in January the elimination of
4,000 jobs throughout the year.
Expenses in the most recent quarter fell to $5.21 billion, down
from $5.48 billion a year earlier.
Write to Daniel Huang at daniel.huang3@wsj.com and Tess Stynes
at tess.stynes@wsj.com
Access Investor Kit for American Express Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0258161092
Access Investor Kit for Costco Wholesale Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US22160K1051
Subscribe to WSJ: http://online.wsj.com?mod=djnwires