American Express Co. posted lower earnings and revenue in the first quarter of the year, hurt by the loss of its relationship with warehouse-club retailer Costco Wholesale Corp., though card member spending climbed.
The results declined less than expected and the company backed its earnings outlook for the year, sending shares 2.2% higher to $77.50 after hours.
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American Express has suffered from issues ranging from the end of its 16-year exclusive deal with Costco, heavy competition and declines in corporate travel budgets.
"The last couple of years have been an important transition period, and we've entered 2017 stronger, more focused and more resilient," Chief Executive Kenneth Chenault said in a statement.
Results again were dragged by the end of the company's relationship with Costco. AmEx's revenue slipped 2.5% to $7.89 billion. Excluding the Costco business and the impact of a stronger U.S. dollar, revenue rose 6.6%. Analysts were looking for $7.75 billion, according to Thomson Reuters.
Card member spending grew 8% during the quarter, excluding the impact of Costco in the year-earlier period and the effect of the stronger dollar.
Best known for its charge cards that require customers to pay their bills in full every month, AmEx is expanding its credit-card portfolio to allow customers to carry a balance. The company also last year ramped up marketing and promotions on its platinum charge card.
"We acquired 2.6 million new cards across our global issuing businesses during the quarter and continued to broaden our reach among millennials with an expanded merchant network and enhanced benefits and services to earn a greater share of their wallet," said Mr. Chenault.
The company backed its 2017 outlook, for earnings of $5.60 to $5.80 a share.
In all for the first quarter, American Express reported a profit of $1.2 billion, or $1.34 a share, down from $1.4 billion, or $1.45 a share, a year earlier. Analysts, on average, were expecting $1.28 a share.
Total expenses ticked up slightly to $5.5 billion.
Write to Anne Steele at Anne.Steele@wsj.com
American Express's expenses ticked up slightly to $5.5 billion. An earlier version of this story misstated the figure. (April 19, 2017)
(END) Dow Jones Newswires
April 19, 2017 17:17 ET (21:17 GMT)