Americans spend again and American Express profit surges – KIRO 7 News Seattle

NEW YORK – (AP) – Spending in restaurants, shops, and entertainment venues has come back into effect as vaccines become more common and that drove American Express sales up in the second quarter.

That momentum increased over the course of the quarter, the company announced on Friday, especially with spending by younger customers.

“We saw card member spending accelerate from the previous quarter, surpassing pre-pandemic levels in June, with most of that spending growth coming from Millennials, Gen Z and small businesses,” Chairman and CEO Stephen Squeri said in a pre-pandemic Statement.

Revenue excluding interest expense rose to $ 10.24 billion from $ 7.68 billion last year, more than the $ 9.47 billion Wall Street was looking for, according to a survey by Zacks Investment Research .

American Express Co. shares rose 3.4% at the opening bell.

Demand for platinum fee-based cards is growing, Squeri said, and American Express registered 2.4 million new cards in the quarter.

The New York-based company made $ 2.28 billion, or $ 2.80 per share, for the three months ended June 30. A year earlier, it made $ 257 million, or $ 0.29 per share. The current quarter was $ 866 million in loan reserves.

This slightly exceeded industry analysts’ forecasts of $ 1.64.

American Express’s consolidated provision for loan losses resulted in a profit of $ 606 million for the current quarter. This was mainly due to the release of provisions and lower net depreciation. In the same period last year, there were $ 1.6 billion in provisions, mainly driven by the significant build-up of credit reserves the company implemented to combat the effects of the pandemic.

American Express took a hit in the pandemic as fewer Americans travel, eat out, or shop. Spending on corporate and personal credit and credit cards fell, and those who held revolving funds paid off their debts.

That spending freeze thawed when infections plummeted during the vaccine launch.

In some regions of the country where vaccination rates are low, infections have started to rise. COVID-19 cases in the US have nearly tripled in two weeks amid an onslaught of vaccine misinformation weighing on hospitals.

At this point in time, the rise in infections in some regions of the United States does not seem to be a major problem given the high and, in parts of the country, rising vaccination coverage.

“We are increasingly optimistic that given the strength of our core businesses, particularly in the US, the momentum we have generated will continue even if the pace of recovery remains inconsistent across regions of the world,” said Squeri. “Based on the current trends, we are confident that in 2022 we will be in the upper range of the EPS expectations that we had for 2020.”

Earlier this month, American Express announced that it was increasing the benefits – and the fee – for its flagship Platinum Card. The annual fee is between $ 550 and $ 695.

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Part of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on AXP at https://www.zacks.com/ap/AXP

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