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American Express Profit Tops View, But Revenue Misses

American Express Co. (AXP) Wednesday reported a 21 percent increase in second-quarter profit, driven largely by revenue growth reflecting higher card member spending and loan growth. Earnings for the quarter trumped Wall Street estimates, but revenues fell short of expectations.

New York-based American Express' second-quarter profit rose to $1.62 billion or $1.84 per share from $1.34 billion or $1.47 per share a year ago. On average, 29 analysts polled by Thomson Reuters expected earnings of $1.82 per share for the quarter.

American Express, the biggest credit-card issuer on the basis of purchases, said revenues, net of interest expense, for the quarter grew 9 percent to $10.00 billion from $9.17 billion a year ago. Twenty-three analysts had a consensus revenue estimate of $10.05 billion.

The growth in revenues reflected higher spending by consumer, small business, and corporate Card Members. Revenues for the quarter also benefited from higher loan volumes and fee income.

Card Member spending grew 10 percent and 2.9 million new cards were acquired, the company said.

Provisions for losses were $806 million, up 38 percent from a year ago. Total expenses for the quarter increased 7 percent to $7.1 billion last year.

"We are a globally integrated payments company and the power of our differentiated business model was evident throughout this quarter's results," said CEO Stephen Squeri.

"We continued our progress towards parity coverage in the U.S., expanded our network internationally and announced new card offerings with three important business partners - Amazon, Marriott, and Wells Fargo."

American express continues to expect full year earnings to be at the high end of its outlook of $6.90 to $7.30. The company now expects 2018 revenues to be up at least 9 percent.

Analysts currently estimate earnings of $7.24 per share and revenue growth of 20.40 percent for the full year 2018.

AXP closed Wednesday's trading at $102.98, up $1.83 or 1.81% on the NYSE. The stock, however, slipped $2.98 or 2.89% in the after-hours trade.

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