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American Express Co AXP-N on Friday topped first-quarter profit estimates as card spending rebounded from last year, dwarfing a jump in costs due to higher reward payouts.

Expenses rose 34 per cent to $9.06-billion on higher customer engagement costs, the company said, sending shares down nearly 2 per cent in morning trading.

Senior executives at AmEx, however, sought to reassure investors that the company’s strategy was paying off. AmEx added 3 million new proprietary cards, with U.S. Consumer Platinum and Gold card and U.S. Business Platinum card customer acquisitions reaching all-time highs in the quarter.

“All of the revenue momentum … was driven by the investments we’ve been making in marketing, value propositions, coverage, technology and talent,” Chief Financial Officer Jeffrey Campbell said on a post-earnings call.

Consumer spending in the United States has been rising as Americans make up for lost time travelling, shopping and dining out as pandemic restrictions ease and COVID-19 retreats from its peak levels.

Despite the Omicron blip in January and early February, travel and entertainment spending on AmEx cards rose 121 per cent on an FX-adjusted basis.

Spending on goods and services, AmEx’s biggest payments category, rose 21 per cent.

Russia, where AmEx suspended all operations in March following Moscow’s invasion of its neighbour, and Ukraine were “very very small markets” for the company, Campbell said in an interview with Reuters.

Remnants of the business there might at some point lead to a writedown but it would not be significant, Campbell added.

AmEx net income dropped 6 per cent to $2.1-billion, or $2.73 per share, for the quarter ended March 31. Analysts had expected it to be $2.44 per share, according to Refinitiv IBES data.

Total revenue excluding interest expense rose 29 per cent to around $11.74-billion.

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