April 23 - American Express outperformed Wall Street expectations for first-quarter profit as cardholders with higher incomes sustained spending on travel and discretionary categories. The credit card issuer recorded robust growth in billed business and revenue, underscoring continued demand for premium payment products.
Billed business - a metric that captures total spending on American Express cards - expanded 9% on a foreign exchange-adjusted basis to $428 billion for the quarter. That rise coincided with a 10% increase in revenue to $18.9 billion.
On a per-share basis, American Express reported earnings of $4.28 for the three months ended March 31, up from $3.64 in the same period a year earlier. The company’s profit beat the average analyst forecast of $4.02 per share, based on estimates compiled by LSEG.
Management described card member activity as unusually strong for the period. "Card Member spending grew 9% FX-adjusted, the highest quarterly growth in three years, driven by strong demand and engagement with our premium products," said Stephen Squeri, the company’s chief executive, in a statement.
Market reaction was modestly positive, with American Express shares trading up approximately 1.2% in premarket activity following the release of results.
From a credit perspective, the company set aside $1.3 billion in consolidated provisions for credit losses during the quarter, compared with $1.2 billion a year earlier. Provisions are a gauge of credit performance and reflect management’s posture toward potential future losses.
American Express has also continued to allocate resources to long-term customer acquisition and engagement. The company said it has stepped up investments in marketing, digital capabilities and rewards programs in recent years to broaden appeal and draw younger Gen Z customers into the cardholder base.
Observers and market participants often look to American Express as an early indicator of consumer spending trends at U.S. card firms. In that role, resilient AmEx results are read as a sign that luxury and high-end consumers are continuing to spend, which can provide support to retailers and consumer goods companies focused on that segment.
Key data points:
- Billed business rose 9% to $428 billion (FX-adjusted).
- Revenue increased 10% to $18.9 billion for the quarter.
- Reported earnings per share were $4.28 versus $3.64 a year earlier; consensus was $4.02.
- Consolidated provisions for credit losses were $1.3 billion, up from $1.2 billion a year ago.
This quarter’s results provide a snapshot of cardholder behavior and the company’s strategy execution, while also reflecting management choices around credit loss provisioning and investment in growth initiatives.