American Express quarterly profit up 15 percent

/ Source: The Associated Press

American Express Co. reported a 15 percent increase in first-quarter net income and revenue, as the company saw a significant rise in card-member spending and stronger financial adviser sales.

The credit card and financial services company said first-quarter net income was $794 million, or 61 cents a share, compared with $692 million, or 53 cents a share, in last year’s first quarter.

The latest quarter’s earnings included an accounting charge of $71 million, or 5 cents a share. Excluding the charge, earnings were $865 million, or 66 cents a share. This figure exceeded the Wall Street estimate of 62 cents a share, according to a Thomson First Call survey of analysts.

Revenue for the quarter was $6.91 billion, above analysts’ average estimate of $6.55 billion and year-ago revenue of $6.02 billion.

American Express said the revenue growth reflects higher card-member spending, financial adviser sales and client asset levels.

American Express’ travel services unit reported record quarterly net income of $665 million, up 14 percent from $584 million a year ago. The unit’s revenue rose 13 percent. Travel commissions and fees increased 23 percent as a result of higher travel sales.

At American Express Financial Advisors, first-quarter income before an accounting change was $228 million, up 71 percent from $133 million a year ago. Net income after the accounting change rose 18 percent to $157 million. The unit’s total revenue increased 22 percent.

Management and distribution fees rose 50 percent due to higher asset and sales levels at American Express Financial Advisors.

Card-member spending rose 21 percent in the quarter, while insurance and annuity-related revenue rose 16 percent.

Consolidated expenses totaled $5.7 billion, up 13 percent from $5 billion a year ago. This increase reflects higher expenses for marketing, promotion, rewards and card-member services, human resources and other operating expenses, the company said.