By Will Feuer
American Express Co. said second-quarter revenue rose 31% as card-holder spending on travel and entertainment surpassed pre-pandemic levels in April and consumers continued to buy goods and services.
The credit-card company's profit fell to $1.96 billion, or $2.57 a share, from $2.28 billion, or $2.80 a share, a year earlier. Analysts had expected a larger decline in profit to $2.42 a share, according to FactSet.
The drop was largely due to a swing in the company's provision for credit losses, which came to $410 million for the quarter, compared with a benefit of $606 million a year earlier. American Express said the change reflects a small net reserve build compared with a $866 million reserve release a year ago.
American Express posted second-quarter revenue of $13.4 billion in the quarter on the higher spending, topping Wall Street expectations for $12.51 billion.
Shares of American Express rose almost 7% in premarket trading to $160 a share.
Card-holder spending rose 30% from a year earlier when adjusted for currency effects, as consumers and businesses resumed travel plans that were on hold the last two years, the New York-based company said.
Along with the increase in travel spending, American Express said it saw customers increase usage of travel-related benefits, which helped push expenses 32% higher from a year earlier.
Spending on goods and services also rose in the quarter, and spending by Millennial and Gen Z card members jumped 48%.
The company raised its full-year revenue guidance to growth of 23% to 25%, from a prior range of 18% to 20%. The company maintained its full-year earnings guidance.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
July 22, 2022 07:37 ET (11:37 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.