Credit card giant American Express said its second-quarter profits rose 8% from a year earlier, helped by higher spending by its card members, fewer delinquencies and more customers signing up for its premium products like the Platinum Card and Gold Card.
The New York-based company said Friday it earned $3.11 billion, or $4.53 a share, compared to $2.89 billion, or $4.08 a share, in the same period a year earlier. The results beat analysts' forecasts,
who were looking for AmEx to earn a profit of $4.40 a share, according to FactSet.
AmEx continues to benefit from global economic growth that has disproportionately benefited the wealthy and high net worth individuals, as its customer bases skews heavily toward those demographics with the Platinum Card, Gold Card and other high-end credit cards. Its customers often put almost all of their spending on credit cards, and pay those cards off at the end of each month. The average AmEx customers spent $6,759 on their cards in the quarter, up from $6,393 in the same period a year earlier.
But at the same time, the company is spending heavily to keep those customers as it faces increased competition from other high-end credit card products like JPMorgan Chase's Sapphire Reserve Card, Citigroup's Strata card and Capital One's Venture X brand. The company's quarterly expenses rose 12% from a year ago, costs that went into increased marketing as well as refreshes of its credit card products.
While the company upped its guidance on how much revenue it expects to bring in this year, the company did not change its profit outlook for the year, as the company plans to put more resources into marketing and bringing in new customers. The company also expects to put additional investments into technology like artificial intelligence, like many other Fortune 500 companies.
Those efforts seem to be paying off. The company signed up another 3 million customers in the second quarter, of which three-quarters of those new customers signed up for an AmEx card with an annual fee.
