American Express’ (AmEx) quarterly net income for U.S. cards could exceed $1 billion next year. Forecaster RAM Research predicts AmEx net income for the first quarter of 2016 will come in at $996 million, driven by higher spending.
AMERICAN EXPRESS U.S. CREDIT CARD NET INCOME
4Q/13: $864 million
1Q/14: $876 million
2Q/14: $770 million
3Q/14: $889 million
4Q/14: $665 million
1Q/15: $934 million
2Q/15: $821 million
3Q/15: $948 million
4Q/15: $709 million
1Q/16: $996 million
Source: American Express; CardData; RAM Research
American Express U.S. Card Services reported first-quarter net income of $934 million, up 7% from $876 million a year ago. Total revenues net of interest expense increased 6% to $4.5 billion from $4.3 billion a year ago. The increase reflected a 7% rise in cardholder spending and higher net interest income.
Provisions for losses totaled $296 million, down 13% from $342 million a year ago. The decrease primarily reflected a larger reserve release this quarter than last year.
Total expenses increased 9% to $2.7 billion from $2.5 billion a year ago. The rise primarily reflected higher rewards and Card Member services expenses driven by increased Card Member spending volumes and additional costs related to renewing certain cobrand relationships.
International Card Services reported first-quarter net income of $134 million, down 16% from $159 million a year ago. The decline reflected the impact of the stronger U.S. dollar.
Total revenues net of interest expense decreased 8% (up 4% FX adjusted2) to $1.2 billion. Provisions for losses totaled $76 million, down 13 percent from $87 million a year ago.
Total expenses decreased 8% (up 1% FX adjusted) to $1 billion. The decrease primarily reflected lower marketing, promotion and rewards costs.
Global Commercial Services reported first-quarter net income of $180 million, down from $184 million a year ago. The decline reflected the impact of the stronger U.S. dollar.
Total revenues net of interest expense decreased 31% (27% FX adjusted) to $827 billion from $1.2 billion. Year-ago revenues included the company’s business travel operations.
Total expenses decreased 42% (39% FX adjusted) to $508 million from $871 million a year ago. Year-ago expenses included the company’s business travel operations.
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