Fueled by rebounding worldwide spending and improved credit quality, American Express (NYSE:AXP) revealed late Monday a 48% jump in fourth-quarter profit.
The company posted net income of $1.06 billion, or 88 cents a share, compared with $716 million, or 60 cents, in the same quarter last year.
Excluding one-time costs related to restructuring and re-engineering, the company earned 94 cents a share, meeting average estimates of analysts polled by Thomson Reuters.
Revenue for the credit card provider was $7.3 billion, up 13% from $6.5 billion a year ago, and in-line with the Street’s view of $7.29 billion.
Earnings were fueled by higher card member spending and travel commissions and fees, partially offset by lower interest income due to a smaller loan portfolio, and lower yields.
Consolidated provisions of losses improved to $239 million compared with $748 million a year ago, a reflection of continuously improving credit quality.
AmEx CEO Kenneth I. Chenault attributed the results to higher consumer, small business and corporate card spending, as well as greater use by online shoppers.
“With cardmember spending up 15% this period, we reached all-time records for the quarter and the full year,” he said. “Unemployment levels and housing remain a concern, but other aspects of the economy continue to show signs of improvement.”
As the economy and credit quality continue to improve, the company said it will continue to gain more flexibility, allowing it to invest in marketing and infrastructure as part of its growth strategy.
Both domestic and international card services improved year-over-year, with U.S. netting income of $701 million, up 70% from $413 million a year ago. Services outside the nation, meanwhile, grew 48% to $102 million.