American Express profit rises as corporate spending picks up
By Aman Shah
(Reuters) - American Express Co posted a better-than-expected 9 percent rise in quarterly profit as spending by corporate card users began to pick up after more than a year of sluggish growth.
A relatively affluent customer base has helped to insulate American Express from tepid consumer spending that has led to an overall decline in credit card usage in the United States.
The company, which has fewer defaulting customers than rival credit card issuers, said on Wednesday that it had not suffered any direct impact from the U.S. government shutdown.
"They largely cater to a consumer base who would likely be less sensitive to the fallout from what's going on in Washington DC," said Sameer Gokhale, an analyst at Janney Capital Markets.
For the third quarter ended September 30, American Express said spending on its cards rose 9 percent after adjusting for foreign currency translations -- the biggest jump in five quarters.
The company, which lends directly to consumers and competes with Visa Inc and MasterCard Inc to process credit card transactions, said its U.S.-billed business rose 8 percent to $158.2 billion.
Chief Financial Officer Jeff Campbell said he was encouraged by the reversal of a trend that had seen growth in corporate card spending lose momentum since the second quarter of 2012.
Speaking on his first post-earnings conference call since taking over from Daniel Henry, Campbell also said it was important that a deal be reached soon to resolve the U.S. budget impasse. Continued...