American Express reports lackluster results

Cardmembers aren't spending like they used to, and profit grew just 1% from a year earlier.

By Kim Peterson Oct 17, 2012 5:17PM
Image: Female customer handing credit card to receptionist (PhotoAlto/Frederic Cirou/PhotoAlto/Getty Images)Shares of American Express (AXP) fell slightly in after-hours trading Wednesday after the company reported a lackluster quarter in which revenue missed expectations.

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.

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