American Express Posts Upbeat Q1 Earnings, But Revenue Misses Estimates

reported better-than-expected earnings for the first quarter, but the company's sales missed analysts' estimates. The New York-based company reported a quarterly profit of $1.53 billion, or $1.48 per share, versus a year-ago profit of $1.43 billion, or $1.33 per share. Its consolidated revenue, net of interest expense, slipped to $7.95 billion from $8.17 billion. However, analysts were projecting a profit of $1.37 per share on revenue of $8.21 billion. Consolidated provisions for losses declined 13 percent year-over-year to $420 million in the quarter, while consolidated expenses slipped 5 percent to $5.2 billion. Its return on average equity widened to 29.0 percent, compared to 28.3 percent a year earlier. U.S. Card Services posted Q1 net income of $934 million, compared to $876 million in the year-earlier period. Net income for International Card Services slipped 16 percent year-over-year to $134 million, while net income for Global Commercial Services fell to $180 million from $184 million. Global Network & Merchant Services posted net income of $444 million in the latest quarter, flat versus the year-ago quarter. "First quarter results showed solid core performance and continued progress in expanding the American Express franchise despite an impact from several of the headwinds we're confronting," said Kenneth I. Chenault, chairman and chief executive officer. "As previously reported, we expect full year 2015 earnings will be flat to modestly down year-over-year with the headwinds we're facing and as we ramp up investments to help offset the impact from ending our relationship with Costco in the U.S. next year. Looking further ahead, we have a range of growth opportunities across the business and continue to be very positive about the moderate to long term outlook for our company." The average estimate among 41 Estimize users was for earnings of $1.40 per share and revenue of $8.3 billion. American Express shares fell 0.88 percent to $80.20 in the after-hours trading session.