American Express said Thursday that its profit jumped in the final three months of the year as the company set aside less money to cover bad loans.
The New York-based credit card company earned $716 million in the quarter, or 60 cents per share, up from $240 million, or 21 cents per share, in the same period a year ago.
On an adjusted basis, excluding discontinued operations, the company earned 59 cents per share, which beat analysts' estimates of 57 cents, according to Thomson Reuters.
The gain broke a streak of eight consecutive quarters of falling profits for AmEx, which traditionally caters to a more affluent clientele.
Quarterly revenue edged lower to $6.49 billion from $6.51 billion last year. However, provisions for loan losses dropped 47 percent to $748 million, from $1.4 billion a year ago. Net write-off and 30-day past due rates remained high but declined from the previous quarter.
The total amount spent on AmEx cards rose to $172.6 billion, up from $160.5 billion the same period last year. The growth reflected a rise in both the number and size of transactions.
Average spending by basic cardmembers rose to $3,209, up from $2,792 the same time last year. Revenue from card fees rose to $549 million, up from $536 million the same time last year.
Marketing and promotion costs rose 36 percent to $713 million in the quarter, up from $524 million.
The results for the fourth quarter of 2008 were also dragged down by a $273 million charge related primarily to severance costs.
The company earned $1.54 per share for the full year, just missing analysts' forecast of $1.55 per share. The company earned $2.32 per share in 2008.
AmEx Chairman Kenneth Chenault noted in a release that while the economic outlook is improving, the company still faces the challenges of elevated unemployment levels, depressed real estate values and weaker household finances.
AmEx shares slipped 94 cents to $41.22 in after-hours trading, after falling 82 cents to $42.16 during the regular session.
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