American Express reports lackluster results
Cardmembers aren't spending like they used to, and profit grew just 1% from a year earlier.
American Express cardholders, largely an affluent group, have reined in spending even as the economy appears to be trending upward. The company's profit grew just 1% from a year earlier to $1.25 billion, or $1.09 per share. That was in line with analyst expectations.
But revenue came in light at $7.86 billion, a 4% increase. Analysts wanted to see $7.89 billion to $7.93 billion. Although cardmember spending rose 8%, that was still significantly less than the double-digit growth seen in the past two years, Reuters reports.
"It represents slower growth than we were generating earlier in the year, a trend that we're seeing among major card issuers," said CEO Kenneth Chenault in a statement.
Shares of American Express closed the day Wednesday up more than 1% to $59.37. But in after-hours trading, shares slumped less than 1%. Shares have skyrocketed 33% over the past year.
Chenault warned in a statement that tightened spending will be a focus for the company going forward, particularly in what he called a "slow growth" economic environment. "We generated solid results this quarter against the backdrop of a very uneven global economy," he said.
More from Top Stocks
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Do it once a year. This allows the best-performing asset classes to take off and run.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.