American Express’s revenue in the last quarter amounted to $7.9 billion, 2 percent lower than a year earlier, and as the world’s largest card issuer reported that it is reducing costs in line with plans, its stock price rose on Wednesday.
According to a business report published on Wednesday, AmEx’s net profit fell by 13 percent in the first quarter of this year compared to the same period last year, to $1.21 billion.
Faced with fierce competition and the termination of several co-brand agreements, which card issuers sign with large corporate partners – mainly retail chains and airlines – for sales through their cards, AmEx has recently launched a cost-saving program, as well as investments in new areas.
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Thus, the company stated that it is on track to reduce operating costs by $1 billion this year, as planned, and to achieve its earnings targets.
AmEx also indicated that the results were supported by slightly higher card fees and growth in consumer credit.
Spending by AmEx members increased by 8 percent in the last quarter compared to the same period last year, while net card fees rose by 7 percent.
Consumer credit, on the other hand, increased by 11 percent, with more than half of the credit in the U.S. being extended to existing members.
Additionally, in the last quarter, AmEx issued 1.7 million new cards in the U.S. and 2.6 million worldwide, which is slightly more than in the last quarter of the previous year.
Thanks to better-than-expected quarterly business results, AmEx’s stock price rose about 2.5 percent in after-hours trading on Wall Street on Wednesday.
