Amex profit rises marginally, spending growth muted
(Reuters) - American Express Co's (AXP.N: Quote) third-quarter profit rose only marginally as cardmember spending growth remained muted for the second quarter in a row.
The company earned $1.25 billion, or $1.09 per share, up 1 percent from $1.24 billion, or $1.03 per share, a year earlier.
Total revenue, net of interest expense, was $7.86 billion, up 4 percent from a year earlier. Revenue grew at the slowest rate in 11 quarters.
The company's American cardholders, mostly affluent consumers, reined in their spending.
Cardmember spending in the United States rose 8 percent in the quarter. That figure, though up from the second quarter, is still below the double-digit growth the company had posted for the nine preceding quarters.
"It represents slower growth than we were generating earlier in the year, a trend that we are seeing among major card issuers," Chief Executive Kenneth Chenault said in a statement.
The company has the lowest delinquency rate among the large credit card companies, including JPMorgan Chase (JPM.N: Quote), Discover Financial (DFS.N: Quote), Capital One (COF.N: Quote), Bank of America (BAC.N: Quote) and Citigroup (C.N: Quote).
But it set aside $479 million to cover future bad loans, reflecting its larger lending portfolio, 92 percent more than it provisioned last year.
"We didn't have the same benefit from substantial reserve releases as last year when write-offs and delinquencies were declining at a faster rate," Chenault said. Continued...