American Express Co. AXP continued to benefit from strong spending growth in the latest quarter, though it fell short on profit. The card giant on Thursday morning posted first-quarter net income of $1.8 billion, or $2.40 a share, down from $2.1 billion, or $2.73 a share, in the year-earlier period. The FactSet consensus was for $2.66 a share. The company saw a 22% bump in consolidated expenses during the quarter, reflecting “higher customer engagement costs, driven by higher network volumes and increased usage of travel-related benefits.” Amex disclosed that total provisions for credit losses were $1.1 billion, “reflecting higher net write-offs and a net reserve build of $320 million.” The company said that credit metrics “remained strong” in the first quarter as it reiterated its full-year outlook for 15% to 17% revenue growth and $11.00 to $11.40 in earnings per share. Amex logged $14.3 billion in total revenues net of interest expense in the first quarter, beating analyst expectations, which were for $14.0 billion. A year prior, Amex notched $11.7 billion in quarterly revenue. Chief Executive Stephen Squeri called out “particularly robust” spending on travel and entertainment in Amex’s earnings release. The company benefited from a 16% boost in card-member spending on a currency-neutral basis in the quarter, while witnessing the addition of 3.4 million new proprietary cards. Amex saw record quarterly account acquisitions for its U.S. Consumer Platinum and Gold, U.S. Business Platinum and Delta co-brand cards. Millennial and Gen Z customers made up more than 60% of the company’s new consumer account acquisitions during the period. “Our customers have been resilient thus far in the face of slower macroeconomic growth, elevated inflation and higher interest rates, with credit performance remaining best-in-class,” Squeri said in the release. “That said, we’re mindful of the mixed signals in the external environment.” He added that Amex is “confident in our ability to achieve our longer-term growth plan aspirations.”
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.