American Express profit doubles as US holiday shoppers spend more

Thu Jan 16, 2014 4:45pm EST

American Express and American Express corporate cards are pictured in Encinitas, California October 17, 2011. REUTERS/Mike Blake

American Express and American Express corporate cards are pictured in Encinitas, California October 17, 2011.

Credit: Reuters/Mike Blake

(Reuters) - Credit card company American Express Co's (AXP.N) quarterly profit more than doubled as customers spent more in the holiday season in the United States, its core market.

U.S. retail sales increased 3.8 percent in the 2013 holiday season, according to data released by the National Retail Federation on Tuesday.

The same day, the U.S. Commerce Department said retail sales including automobiles, gasoline stations and restaurants rose 1 percent from a year earlier in the October-December period. (r.reuters.com/syk96g)

American Express said worldwide spending on its cards rose 8 percent in the quarter ended December 31, the biggest jump in four quarters.

Net income rose to $1.31 billion, or $1.21 per share, in the fourth quarter from $637 million, or 56 cents per share, a year earlier.

Total revenue, net of interest expense, increased 5 percent to $8.55 billion. Revenue at the company's U.S. card services unit rose 8 percent in the quarter.

American Express earned $1.25 per share, excluding expenses related to merchant litigation settlements reached last month.

Analysts on average had expected the company to earn $1.26 per share on revenue of $8.54 billion, according to Thomson Reuters I/B/E/S.

U.S. regulators fined the company in December over deceptive and misleading practices in selling credit card add-on products, and forced it to repay a total of $59.5 million to duped customers.

American Express shares closed little changed at $87.78 on Thursday on the New York Stock Exchange. The stock rose slightly in trading after the bell.

(Reporting by Aman Shah in Bangalore; Editing by Kirti Pandey)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
chekovmerlin wrote:
American Express caters to the rich crowd. Most middle class and lower economic classes DO NOT even hold that card. Too expensive. It’s good that they are making money, but the story is biased towards the elite.

Jan 16, 2014 7:31pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.