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American Express Co. late yesterday reported net income of $437 million for the first quarter ended March 31, down 55.9% from $991 million during the same period last year. AmEx's U.S. Card Services business reported a net loss of $25 million as the issuer increased charge-offs and cardholders cut back on spending. A year ago, the unit reported net income of $523 million. AmEx boosted its provision for U.S. card losses during quarter by 56.6%, to $1.38 billion from $881 million a year ago. Managed U.S. card receivables averaged $56.5 billion, down 11.2% from $63.6 billion. AmEx wrote off 8.5% of its U.S. card receivables, up 420 basis points from 4.3% a year ago. The 53.4 million U.S. AmEx cards in force during at the end of the quarter was up 1% from 52.9 million a year ago. AmEx's international card services unit fared better, earning $39 million in net income, down 70.7% from $133 million. The unit set aside $335 million for loan losses, up 46.3% from $229 million. International credit card loans averaged $8.5 billion for the quarter, down 25.4% from $11.4 billion during the same period a year ago. The issuer charged off 6.4% of those loans, up 200 basis points from 4.4%. International charge card receivables were averaged $5 billion during the quarter, down 20.6% from $6.3 billion. AmEx reported 38.2 million cards in force outside the U.S. as of the end of March, up 8.8% from 35.1 million a year earlier. AmEx's global commercial services segment contributed $86 million in net income during the quarter, down 43% from $151 million a year ago. Global network and merchant services reported $237 million in net income, up 6.3% from $223 million. In a conference call with analysts this morning, Dan Henry, AmEx chief financial officer, touted companywide earnings despite higher charge-offs and economic challenges. "These results reflect the competitive strength of our diverse business model, given the multiple roles we play as a payment issuer, processor and network provider. Additionally, they underscore the flexibility of the model and our ability to adapt to a very difficult economic environment, characterized by slower spending levels and higher unemployment," Henry said. AmEx shares were trading at around $25.50 per share on the New York Stock Exchange in late-day trading today, up from $20.97 per share at yesterday's close.
