AXP

By Will Feuer

American Express Co.'s profit fell in the fourth quarter as the company stashed away more cash to cover potential credit losses down the line.

The New York City-based credit-card company logged net income of $1.57 billion, or $2.07 a share, down from $1.72 billion, or $2.18 a share, a year earlier. Analysts surveyed by FactSet were expecting earnings of $2.23 a share.

Revenue net of interest expense rose 17% to $14.18 billion, driven by increased member spending and higher net-interest income. Analysts surveyed by FactSet had been expecting revenue of $14.23 billion.

The company's provision for credit losses in the fourth quarter surged to $1.03 billion from $53 million a year ago, though American Express said credit metrics remained strong in the quarter and below prepandemic levels. Financial companies have broadly been growing their provision for credit losses, an indication that the sector is bracing for an economic slowdown to hit their customers.

Costs in the quarter rose 15% to $11.3 billion, reflecting higher costs tied to customer engagement and increased usage of travel-related benefits. Operating costs also rose, mostly due to higher compensation costs and a net loss on Amex Ventures investments of $234 million in the quarter.

Write to Will Feuer at Will.Feuer@wsj.com

(END) Dow Jones Newswires

January 27, 2023 07:16 ET (12:16 GMT)

American Express (NYSE:AXP)
Historical Stock Chart
From Feb 2023 to Mar 2023

American Express (NYSE:AXP)
Historical Stock Chart
From Mar 2022 to Mar 2023