(Reuters) – American Express Co beat Wall Street estimates for first-quarter profit on Friday, driven by strong spending from its card holders globally as consumer appetite for travel and entertainment reached pre-pandemic levels.
With pandemic restrictions easing and COVID-19 retreating from its peak levels, consumer spending in the United States has been rising for months as Americans make up for lost time traveling, shopping and dining out.
The trend has also fueled bullish spending forecasts from executives at major Wall Street banks including JPMorgan Chase & Co, Wells Fargo and Bank of America Corp.
Travel and entertainment spending was up 121% on a forex-adjusted basis compared with a year earlier and hit pre-pandemic levels globally for the first time in March, AmEx said.
Shares in American Express rose 1.5% to $188 before the bell as the New York-based company’s total revenue excluding interest expense rose 29% to around $11.74 billion.
The payments company expects the momentum to continue into the rest of 2022 and reaffirmed its forecast for annual net revenue growth between 18% and 20% and earnings per share of $9.25 to $9.65.
AmEx posted net income of $2.1 billion, or $2.73 per share, for the quarter ended March 31, compared with $2.2 billion, or $2.74 per share, a year earlier. Analysts on average were expecting a profit of $2.44 per share, according to Refinitiv IBES data.
The company, however, saw a 34% surge in expenses due to higher customer engagement costs and added that compensation costs contributed to higher operating expenses.
(Reporting by Mehnaz Yasmin and Niket Nishant in Bengaluru; Editing by Vinay Dwivedi)
