American Express Revenue, Profit Rise -- Update
July 19 2019 - 9:19AM
Dow Jones News
By Kimberly Chin
Revenue at American Express Co. was lifted in the latest quarter
by higher card-member spending, loans and card fees, though
expenses from rewards programs also increased.
Total revenue, net of interest expense, rose 8.4% to $10.84
billion for the quarter. Analysts surveyed by FactSet expected
revenue of $10.83 billion.
Discount revenue, which reflects the fees charged to merchants
for accepting AmEx cards, was $6.58 billion, a 6.2% gain from a
year ago. Net card fees rose 17% for the quarter.
Card-member rewards expenses, including the points that AmEx
pays when cardholders redeem for hotels, airfare and other rewards,
rose 9% to $2.65 billion.
Total expenses were up 9.2% driven by card-member spending,
consumers using card benefits more frequently and continued
investments in co-brand partnerships, the company said Friday.
In recent years, AmEx has promoted lending to its card member
base to help boost revenue following the loss of card partnerships,
including that with Costco Wholesale Corp.
Card-member loans rose 10% from a year ago to $83.2 billion The
company generated $2.76 billion from interest on loans, up 16% from
the year prior.
AmEx said its provision for losses was $861 million in the
quarter, a 6.8% increase from a year earlier. Its loss reserve as a
percentage of loans was 2.6% up from 2.4% a year earlier.
AmEx reported second-quarter profit of $1.76 billion, or $2.07 a
share, up from $1.62 billion, or $1.84 a share, a year earlier.
Analysts were looking for $2.03 a share.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
July 19, 2019 09:04 ET (13:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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