Amex Reports Card Growth Boosts Earnings

American Express Company today reported that strong cardholder spending helped boost fourth-quarter income to $925 million, up 23 percent from $751 million a year ago. The company said the quarter helped generate full-year 2006 income of $3.7 billion, up 16 percent from $3.2 billion last year.

American Express CFO Gary Crittendon, in comments to financial analysts late today, noted that the company added 7 million cards last year, including launching the first corporate card as a joint venture in China. "The opportunity there is limited by the discount rate. Now, the opportunity for us is the Chinese cardholders traveling from China."

While he said that the company faced "a challenging corporate travel environment," Crittendon noted, "Our caution comes more from environmental comparisons from an expense perspective than anything in the environment itself. We've saw a bit of a dip in spend two quarters ago. We saw average spend dip down 2 percent on the consumer and the corporate side, but it's been pretty consistent since then. We do acknowledge that the expense and the provision comparisons are a little tougher in the first half."

"Our strong revenue and earnings this quarter were driven by record cardmember spending during the holiday shopping season and continued growth in our loan portfolio," said Kenneth Chenault, chairman and chief executive, in a prepared statement.

"We continued a multi-year program of aggressive business building initiatives that helped us add 1.5 million cards during the quarter and deliver broad-based revenue growth that was again at the top of the industry."