American Express Co. is spending money to make money. From its latest quarterly report, it seems that strategy is working.
Cardholder spending during the second quarter rose to an all-time high of $207.6 billion, an increase of 18% over the prior year quarter, the credit card issuer said Wednesday. On average, cardholders spent $3,767, a 15% increase over the second quarter of last year.
That helped drive net income up 31% to $1.33 billion, or $1.10 a share, from $1.02 billion, or 84 cents per share, a year earlier. Total revenue climbed 12% to $7.62 billion.
Expenses also rose, increasing 21% to $5.5 billion as the company invested more resources into its business and enhanced its rewards programs to encourage more cardholder spending. Money spent on cardholder rewards and services jumped 35% to $1.79 billion, the company said.
Amex, long recognized as the card brand for the well-heeled set, has been making a concerted effort in recent months to move beyond its traditional customer base. Namely, it's been reaching out to a younger, more technology-savvy consumer by expanding its online capabilities through applications on Facebook and Foursquare.