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.
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