Card-billed business for American Express Global Commercial
Services, the division that houses corporate cards, increased 2 percent year
over year in the fourth quarter to $105.1 billion. GCS net income decreased 22
percent to $382 million. The 13.6 billion cards in force represent a 10 percent
year-over-year decline.
For the full year ending Dec. 31, card-billed business also
increased 2 percent, to $408 billion, while net income decreased 6 percent to
$1.9 billion.
Much as he did after the third
quarter, when card-billed business increased a modest 1 percent, Amex CFO
Jeff Campbell maintained that fourth-quarter GCS performance in the U.S. was
"healthy," particularly in the middle-market and small business
portfolios. However, "spending in large corporations remains weak, with
billings declining year over year as we've seen in recent quarters."
Some travel industry players have forecast increasing travel
in 2017, but Campbell said it's important to keep in mind that those are forward-looking
sentiments, based on customer expectations. Amex billings in the brief few
weeks since the U.S. presidential election, which included three U.S. holidays,
didn't offer any indication that business travel volume would rise in 2017. "We're
certainly hopeful that a lot of the other commentary from other players in the
travel industry about [air] bookings is correct. I just can't point to anything
in our Q4 results that would suggest … any meaningful uptick for us,"
Campbell said. In short, by Amex's measure, it's too soon to tell.
Across Amex's full portfolio, fourth-quarter net
income decreased 8 percent year over year to $825 million, owing to higher
spending on growth initiatives, primarily higher marketing and promotion
expenses, according to the card network. However, Campbell said the company is
ahead of its plan to reduce its cost base by $1 billion.