Image: American Express Company
(Reuters) – Credit card issuer American Express Co reported a fourth-quarter profit on Friday that beat analysts’ estimates, as more people used its cards for shopping and paying bills while a strong U.S. retail sales environment also helped.
Spending by customers using AmEx cards during the quarter rose 6% in the United States and 4% in overseas markets, as the company spent more on its rewards program to woo customers.
The company spent $2.72 billion on card member rewards, up 8% from a year earlier. This pushed up total expenses by 9% to $8.36 billion in the reported quarter.
U.S. retail sales, a measure of purchases at stores, restaurants and online, rose every month in the fourth quarter helped in part by a strong holiday shopping season.
The company’s net income fell to $1.69 billion, or $2.03 per share, in the quarter ended Dec. 31, from $2.01 billion, or $2.32 per share, a year earlier.
Analysts were expecting a profit of $2.01 per share, according to IBES data from Refinitiv.
Total revenue, excluding interest expense, rose 9% to $11.37 billion, edging past estimates.
Reporting by Bharath Manjesh in Bengaluru; Editing by Shounak Dasgupta.