American Express Co.'s second-quarter profits fell 48% from a year earlier, but the company reported encouraging signs on the credit front.

The company made $337 million, or 9 cents a share. Excluding costs related to buying back preferred shares from the government,

Amex would have made 27 cents a share, a penny higher than the average analyst estimate.

Last week, the $117 billion-asset New York company reported that the managed chargeoff rate for its U.S. credit card loans increased 150 basis points from the previous quarter to 10% in the second quarter — well below the 200 basis point to 250 basis point increase it projected in April.

On Thursday, Amex said that if delinquencies, bankruptcies and writeoffs continue to fall below the levels it had anticipated, it expects the chargeoff rate on its U.S. credit card loans to fall back below 10% in the second half.

Revenue, net of interest expense, increased 2.8% from the previous quarter, but fell 18.3% from a year earlier to $6.1 billion. Amex said the decline in spending on its cards in June "moderated slightly from earlier in the quarter."

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