American Express Co. on Monday said its fourth-quarter profit rose 49 percent, as its customers spent more and got better about paying their bills.
The card issuer said net income after paying preferred dividends jumped to $1.05 billion, or 88 cents per share, compared with $707 million, or 60 cents per share, in the 2009 fourth quarter.
The most recent results include $113 million in charges announced last week, related to the elimination of about 500 jobs in its customer service operations. Excluding the charges, profit for the quarter came to 94 cents per share.
Revenue rose 13 percent to $7.32 billion, from $6.49 billion in the prior year.
Wall Street analysts were expecting profit of 95 cents per share, on $7.28 billion in revenue, according to Fact Set.
CEO Kenneth Chenault said consumers, small businesses and corporate customers all increased their spending in the quarter. Customer spending rose 15 percent to $197.7 billion, from $172.6 billion last year. The number of cards in force held steady in the U.S. at 48.9 million, while international cards rose 8 percent to 42.1 million, from 39 million a year earlier.
The company also set aside less money to cover unpaid bills, as its customers got better at making payments on time.
Net write-offs for the quarter fell 40 percent to $117 million, from $194 million a year earlier. American Express said the percentage of U.S. payments past due by 30 days or more fell to 1.5 percent, from 1.8 percent in the 2009 fourth quarter. The percent past due by 90 days dropped to 0.9 percent, from 1.6 percent a year ago.
American Express said its expenses for the quarter rose 17 percent, to $5.61 billion, from $4.78 billion the prior year. The increase reflected higher spending on card member rewards and services, along with a 31 percent jump in salaries and employee benefits, and a 27 percent leap in spending on professional services.
The increase caught the eye of Keefe, Bruyette and Woods analyst Sanjay Sakhrani, who said he expected the matter to be raised during the company's conference call to discuss results later Monday.
Overall, however, Sakhrani said it was a good quarter, with stronger revenue than expected and lower losses on unpaid balances.
In afterhours trading, American Express shares fell 63 cents to $45.35, after slipping 21 cents to end the regular session at $45.79.