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American Express Net Income Declines in 1Q

Updated:
NEW YORK (AP) _ American Express Co., which specializes in travel services and credit cards, said Monday that its net profit fell in the first quarter, reflecting the spinoff last year of its Ameriprise Financial Inc. advisory unit.

Excluding Ameriprise, however, earnings were up sharply on strength in both domestic and foreign card operations.

Net income in the January-March period was $873, or 69 cents a share, down from $946 million, or 75 cents a share, a year earlier.

Revenue for New York-based American Express for the quarter was $6.33 billion, up 12 percent from $5.64 billion a year earlier.

Analysts surveyed by Thomson Financial had projected first-quarter earnings at 69 cents a share on slightly higher income of $6.35 billion.

Income from continuing operations _ which excludes results from Ameriprise _ totaled $876 million, or 70 cents a share, in the January-March period, up 18 percent from $745 million, or 59 cents a share, a year earlier.

In early trading, American Express shares fell 60 cents, or 1.2 percent, to $51.65 on the New York Stock Exchange.

Kenneth I. Chenault, chairman and chief executive, said in a statement accompanying the report that results were strong ``in each of our major businesses, and overall revenue growth was among the strongest we've generated in years.''

Chenault said that average spending per card holder continued to rise among affluent consumers, small businesses and mid-sized corporations. And, he said, American Express added 1.5 million card customers in the first quarter, bringing the total for the past year to 6.4 million.

The report said that net income from U.S. card services rose 13 percent to $546 million in the January-March period from $482 million a year earlier.

But that profit growth came at a cost of higher expenses for marketing, promotion, rewards and card member services, American Express said. The company said it took a $73 million after-tax charge ``related to higher redemption estimates for the U.S. Membership Rewards program.''

Net income in the international card and global commercial services unit increased 11 percent to $213 million in the first quarter from $192 million a year earlier.

Global network and merchant services registered $166 million in first-quarter net income, up 50 percent from $111 million a year earlier.
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