American Express Co. said Thursday a big jump in its cardholders' spending helped its first-quarter earnings more than double to $885 million.
American Express, which set aside less money for losses on its credit cards, joined the nation's big banks in reporting improvement in credit-card operations. It said cardholder spending rose 16 percent, rebounding strongly from the recessionary lows of last year.
For the three months ended March 31, American Express reported a profit of $885 million, or 73 cents per share, compared with $437 million, or 31 cents per share, a year earlier. Revenue rose 11 percent, to $6.6 billion from $5.93 billion last year.
That result beat forecasts. Analysts surveyed by Thomson Reuters expected a profit of 64 cents per share on revenue of $6.34 billion.
Shares of American Express rose 77 cents, or 1.6 percent, to $47.54 in after-hours trading. It ended the regular session at $46.77.
While the company saw increased spending, American Express CEO Kenneth I. Chenault also said, "throughout the industry and at American Express we saw further signs that consumers are managing their post-recessionary finances more cautiously."
The company sounded more upbeat than it did after the fourth quarter. But it also said it was facing some of the challenges it was dealing with then: high unemployment and the uncertain legislative environment. The federal government recently passed new credit-card regulations.
The company said the biggest turnaround in spending came from corporate cardholders and banks that issue cards on its network. Consumer and small business volumes also rose in part because of strength in travel, entertainment and other discretionary categories.
The company said it raised spending on marketing and promotion back to pre-recessionary levels.
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