NEW YORK (AP) — American Express said Friday second-quarter profits jumped 39% as the credit card company benefitted again from a broad increase in cardmember spending as well as more of its customers carrying a balance.
Profit reached $3.02 billion, compared to $2.17 billion in the same period a year ago. On a per-share basis, AmEx earned a profit of $4.15. Excluding one-time gains, AmEx earned $3.49 per share, handedly beating analyst’s forecasts of $3.24 per share, according to FactSet.
AmEx once again benefitted from its cardmembers — who tend to be wealthier and less exposed to economic fluctuations — continuing to spend on their cards, despite the economic uncertain and the effects of inflation.
Amex customers spent $440.6 billion on their cards last quarter, up 3% from the year before. Merchants pay a fee for each time they accept an AmEx card. That fee ranges depending on industry and merchant size but is typically 2% to 4%.
Further, AmEx customers are keeping a balance on their cards for longer and for higher amounts as well. The company reported $130.8 billion in cardmember loans, up 14% from the year before.
That helped AmEx earn record interest income of $5.79 billion in the quarter, up 21% from the year before. The company had to set aside a modestly larger amount to cover potentially bad loans this quarter.
“We continued to drive momentum across the business, including stable growth in billings at 6%, strong new card acquisitions of 3.3 million, double-digit growth in card fee revenues for the 24th consecutive quarter, and excellent credit performance,” said Steve Squeri, the company’s chairman and CEO, in a statement.
AmEx also raised its full-year profit forecast to a range of $13.30 to $13.80 per share, up from $12.65 to $13.15 per share that it previously had forecasted. The company had $440.6 billion in transactions charged on its network last quarter, up 3% from a year earlier.
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