American Express Company (NYSE:AXP) has posted 8.1% rise in its 2014 third quarter profit, compared to last year. The profit is attributed to higher spending by card holders during the period, something attributed to a stronger U.S. economy.
The company reported a net profit of $1.48 billion, or $1.40 per share, beating the $1.37 billion, or $1.25 per share, the company registered over the same period last year. The figure beat the $1.37 per share that analysts expected.
The company’s revenue for the same period ended 30th September didn’t change much from what it registered last year. The figure stood at $8.33 billion compared to $8.30 last year.
American Express Company (NYSE:AXP) has struggled with the revenue this year, falling short of its target every financial quarter.
“We are beginning to see modest acceleration in our volumes but revenue is not growing as fast as we, and you, would like to see,” said Chief Financial Officer Jeffrey Campbell, in a conference call with investors and analysts. His comments were also echoed by the Chief Executive Kenneth Chenault.
The company has been working ways to increase its revenue, even going as far as expanding the scope of its services to include low income customers who use their cards for small daily shopping. The company also recently introduced prepaid card services.
Over the years, American Express Company (NYSE:AXP) has been focusing on affluent customers. This has greatly reduced the number of defaulters. The company has also benefited by avoiding issuing its cards through banks like is done by other market players such as Mastercard and Visa.
American Express Company (NYSE:AXP) has been contending with a weakening global economy, but Campbell said that it’s still too early to tell whether the trend will affect consumer spending.
Thi article has been written by Victor Ochieng.