American Express Co. Monday posted a surprisingly strong 14 percent jump in third-quarter earnings as corporations and consumers boosted spending.
It was the 15th consecutive quarter that the U.S. credit-card and travel services giant reported double-digit profit growth, providing fresh proof that U.S. consumers are opening their wallets despite sharply higher energy prices.
American Express said net profit rose 13.8 percent to $1 billion, or 82 cents a share, from $879 million, or 69 cents a share, in the year-ago quarter.
Income from continuing operations -- excluding earnings from the asset-management business that American Express had spun off to shareholders and a tax unit it sold to H&R Block Inc. -- grew even faster, rising 23 percent to $865 million.
American Express said revenues rose 11 percent to $6.1 billion, as it increased the number of cards in circulation by 5.7 million and cardholders, on average, charged 12 percent more on its cards than they did last year.
That helped it enjoy a 16 percent jump in discount revenue -- essentially the fee it charges retailers who accept American Express cards.
The results were the first to come from American Express as a stand-alone entity. In late September, the company spun off American Express Financial Advisors to its shareholders. The spin-off, called Ameriprise Financial Inc., is now an independent, publicly traded company based in Minneapolis, Minnesota. Also, in early August, American Express sold its tax and business services unit to H&R Block for $220 million.
The third-quarter results included several one-time items, including a tax benefit of $105 million and a $49 million provision for losses associated with Hurricane Katrina.
American Express is one of the only a handful of independent credit-card issuers left in the United States after a summer of consolidation that saw three of its rivals -- MBNA Corp., Providian Financial Corp. and Metris Cos. Inc. -- get snapped up by banks.
Yet from the beginning of the year through last Friday’s close, American Express shares had fallen about 16 percent, underperforming the Standard & Poor’s 500 index, which fell about 13.6 percent during that time, and the S&P Consumer Finance Subindex, which was down 9.3 percent.