(Reuters) – American Express reported first-quarter profit on Friday that beat Wall Street expectations, driven by strong spending among its cardholders around the world, particularly in travel and leisure.
Household spending has been on the rise in the United States in recent months with the easing of restrictions related to the COVID-19 pandemic, as Americans make up for lost time traveling, shopping and eating out.
This trend has also fueled the optimism of the leaders of the main Wall Street banks, in particular JPMorgan, Wells Fargo and Bank of America, which have ensured for several months that American consumption is doing well.
American Express reported a 121% year-on-year increase in transactions, adjusted for the exchange rate, related to travel and leisure, which thus returned to their pre-pandemic level in March.
The credit card issuer expects this momentum to continue through the end of the year. He also reiterated his forecast for annual net revenue growth of between 18% and 20% and earnings per share of between $9.25 and $9.65.
The company’s first-quarter revenue, net of interest expense, rose 29% to around $11.74 billion (€10.85 billion).
Its quarterly net income was $2.1 billion, or $2.73 per share, compared with $2.2 billion, or $2.74 per share a year ago.
Analysts had expected net earnings of $2.44 per share according to IBES data from Refinitiv.
The company, however, also saw a 34% increase in costs due to increased customer engagement costs and claims costs.
The title American Express was down 1.2% in trading before the opening of Wall Street.
(Report Mehnaz Yasmin and Niket Nishant; French version Valentine Baldassari, editing by Kate Entringer)