By Maria Aspan
NEW YORK (Reuters) - American Express Co's
The company's wealthy customers spent more on their credit cards than a year earlier, but expenses outpaced American Express's revenue growth as the company spent more on rewards programs for its customers.
The credit card lender and processing network said on Wednesday it earned $1.18 billion, or 97 cents per share, in the first quarter -- up from $885 million, or 73 cents per share, a year earlier.
The earnings were 4 cents per share better than analysts' average expectation of 93 cents per share, according to Thomson Reuters I/B/E/S.
The New York-based company was one of the first to recover from a surge in losses on its credit cards during the financial crisis. It has refocused its business on processing the transactions of high-spending customers who mostly pay their bills in full every month.
Spending on American Express cards rose 17 percent.
Chief Executive Kenneth Chenault said in the earnings release that the company's results reflected "credit quality and billed business trends that are among the best we've seen."
Revenues rose 7 percent from a year earlier, slightly more than expected, to $7.03 billion.
Expenses soared 19 percent to $5.2 billion, with the biggest increases coming from what the company spends on its rewards programs for customers.
Chenault said in the release that the increase in expenses had helped American Express jump-start its expansion into new payment technologies, including online payments. But the company plans "to slow the growth of our operating expenses toward the end of this year and into next," he said. .
American Express shares closed up less than 1 percent at $47.00 on Wednesday, and fell 1.3 percent to $46.41 in after-hours trading following the earnings report.
(Reporting by Maria Aspan; Editing by Gary Hill)
