American Express Co. said third-quarter profit rose 8.1 percent, beating analysts' estimates, as customer spending increased.
Net income climbed to $1.48 billion, or $1.40 a share, from $1.37 billion, or $1.25, a year earlier, the New York-based lender said today in a statement. The average estimate of 26 analysts surveyed by Bloomberg was for adjusted profit of $1.37 a share.
Chief Executive Officer Kenneth I. Chenault, 63, is seeking to broaden Amex's reach beyond affluent consumers through partnerships with merchants such as McDonald's Corp. and Wal-Mart Stores Inc. and by expanding its prepaid-card products. The firm is also working with technology companies, including Apple Inc., to provide consumers more ways to make payments using mobile phones and other digital devices.
"While the economy is stronger, it is not growing as fast or as steadily as most people would like," Chenault said in the statement. "Our focus will be on delivering earnings growth in an environment that is characterized by rapidly changing technologies, intense competition, regulation and an economy that may continue to grow at only a modest pace."
Amex has declined 11 percent this year, compared with the 0.7 percent gain of the 85-company Standard & Poor's 500 Financials Index.
The U.S. and 17 states are suing Amex over claims the firm's rule barring merchants from steering customers to use other card brands is stifling competition. American Express argues the restrictions are needed to compete with the "duopoly" of networks Visa Inc. and MasterCard Inc. Testimony in the antitrust case was concluded in August before U.S. District Judge Nicholas Garaufis in New York.
American Express shares will probably "remain volatile" until the case is resolved, Richard Shane, an analyst at JPMorgan Chase & Co., said in a note before the results were announced. "Volatility around a ruling may provide a short-term opportunity for investors over the next three to four months."
The firm has also shaken up management. Neal Sample took over as head of Amex's enterprise growth business after the unit's former president, Dan Schulman, left to become PayPal Inc.'s president and CEO designee. In July, Laureen Seeger joined as general counsel from McKesson Corp., a health-care company.
