* Third-quarter earnings per share $1.25 vs est. $1.22
* Revenue up 6 percent to $8.30 bln
* Cardmember spending growth highest in five quarters
* No direct impact from U.S. government shutdown - CFO
By Aman Shah
Oct 16 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 Sept. 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
"The alternative is an outcome that would erode consumer
confidence and jeopardize a still-uncertain economic recovery,"
U.S. lawmakers are set to vote late Wednesday on a
bipartisan Senate deal to break the fiscal impasse in Washington
and avert a historic debt default, hours before the government's
borrowing authority is set to run out.
CREDIT QUALITY IMPROVES
American Express has the lowest delinquency rate among the
biggest credit card issuers, which include JPMorgan Chase
, Discover Financial, Capital One, Bank
of America and Citigroup.
Its net-lending write-off rate for the quarter dropped to a
low of 1.7 percent, compared with 1.9 percent in the
year-earlier period, indicating that more customers were keeping
up with card payments.
Net profit rose to $1.37 billion, or $1.25 per share, for
the quarter ended Sept. 30, above analysts' expectations of
$1.22 per share, according to Thomson Reuters I/B/E/S.
Total revenue, net of interest expense, rose 6 percent to
$8.30 billion, beating average Wall Street estimates for the
first time in five quarters.
Shares of American Express, which has a market valuation of
$81.2 billion, have risen about 30 percent this year,
outperforming a 19 percent rise on the broader S&P 500 Index
They were up marginally in extended trading after closing at
$76.32 on Wednesday on the New York Stock Exchange.