American Express Co. said its fourth-quarter profit rose 49 percent, as its customers spent more and got better about paying their bills.
The card issuer said late Monday net income after paying preferred dividends jumped to $1.05 billion, or 88 cents per share, compared with $707 million, or 60 cents per share, in the 2009 fourth quarter.
The most recent results include $113 million in charges announced last week, related to the elimination of about 500 jobs in its customer service operations. Excluding the charges, profit for the quarter came to 94 cents per share.
Revenue rose 13 percent to $7.32 billion, from $6.49 billion in the prior year.
Wall Street analysts were expecting profit of 95 cents per share, on $7.28 billion in revenue, according to Fact Set.
CEO Kenneth Chenault said consumers, small businesses and corporate customers all increased their spending in the quarter. Customer spending rose 15 percent to $197.7 billion, from $172.6 billion last year. The number of cards in force held steady in the U.S. at 48.9 million, while international cards rose 8 percent to 42.1 million, from 39 million a year earlier.
Chief Financial Officer Dan Henry said the company has seen a change in the way customers use their cards, with more "transactors," or people who pay their bills in full each month, compared with more people carrying balances in the past.
The company, which also operates a payment processing network, caters to more affluent card holders than other card companies. That has helped its customers have recover from the economic downturn somewhat faster than the broader industry.
One reflection of that is the number of unpaid bills, which has fallen faster for American Express than for its competitors. Net write-offs for the quarter fell 40 percent to $117 million, from $194 million a year earlier. American Express said the percentage of U.S. payments past due by 30 days or more fell to 1.5 percent, from 1.8 percent in the 2009 fourth quarter. The percent past due by 90 days dropped to 0.9 percent, from 1.6 percent a year ago.
As a result of the payment improvements, the company kept less money aside to cover balances its customers left unpaid. At the end of the fourth quarter, American Express' reserves to cover unpaid bills were at $3.65 billion, above the level from a year ago, but down $672 million from the third quarter.
American Express said its expenses for the quarter rose 17 percent, to $5.61 billion, from $4.78 billion the prior year. The increase reflected higher spending on card member rewards and services, along with a 31 percent jump in salaries and employee benefits, and a 27 percent leap in spending on professional services.
Chief Financial Officer Dan Henry said during a conference call to discuss results that the increased spending reflected, in part, investments in new technologies and businesses. He said spending is above historic levels in certain areas, including developing more tools that its merchants can use to analyze customer data.
Overall, Keefe, Bruyette and Woods analyst Sanjay Sakhrani said it was a good quarter, with stronger revenue than expected and lower losses on unpaid balances.
For the full year 2010, American Express said net income rose to $4.01 billion, or $3.35 per share, from $1.8 billion, or $1.54 per share for 2009. Revenue advanced to $27.82 billion against $24.52 billion a year earlier.
© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.