American Express, the biggest U.S credit-card issuer by purchases, said second-quarter profit rose 37 percent as customers increased spending and the company booked a $1 billion gain from the sale of its Costco Wholesale portfolio.
Net income climbed to $2.01 billion, or $2.10 a share, from $1.47 billion, or $1.42, a year earlier, the New York-based company said Wednesday in a statement. Adjusted earnings per share, which exclude a restructuring charge, were $2.26, beating the $1.97 average estimate of 22 analysts surveyed by Bloomberg.
Revenue slid 0.6 percent to $8.24 billion, missing analysts' estimates of $8.46 billion, while expenses declined 15 percent to $4.8 billion, exceeding predictions. Excluding the Costco sale and restructuring charge, expenses were flat for the quarter.
"We again made substantial investments in marketing and technology to help grow the business," Chief Executive Officer Ken Chenault said in the statement. "At the same time, operating expenses continued to be well managed."
AmEx expects full-year earnings per share to be at the high end of the previously forecast range of $5.40 to $5.70, while the prediction for 2017 remains unchanged at $5.60, Chenault said.
Chenault, 65, has said quarterly results will be uneven as the company spends more on marketing to attract customers, and competitors' efforts to cut card fees crimp profits. The CEO has shuffled his top managers and pushed the firm to focus on lending as part of his efforts to reverse AmEx's worst stock slump since the financial crisis.
Business on 07/21/2016