Credit-card giant American Express (AXP) on Thursday reported a 70% increase in third-quarter profits from a year ago on improved consumer spending.
Earnings from continuing operations rose to $1.09 billion, or 90 cents a diluted share, from $642 million, or 54 cents, in the same period a year earlier, the New York-based company said in a statement.
The figures easily beat Wall Street’s projected estimate of 86 cents a share.
“Cardmember spending rose a strong 14% with the largest increases coming from businesses where we’ve been making significant investments: charge and premium co-brand products, corporate cards and cards issued by our bank partners,” chief executive Kenneth I. Chenault said in the statement.
Revenue jumped 17% to slightly more than $7 billion.
The credit card industry has come under increasing government scrutiny in the wake of the recent financial crisis. Credit card companies have been criticized for allegedly hiding fees and providing misleading information to consumers.
Earlier this month Chenault vowed to fight an anti-trust lawsuit filed by the U.S. Justice Department. The government is challenging AmEx contracts that bar merchants from steering consumers to cheaper card brands and alternative payment forms.
AmEx’s is arguing that merchants are willing to pay more for American Express because its cardholders are generally fairly affluent and make for good customers. Visa Inc. (V) and MasterCard Inc. (MA), payment networks whose business models are different than AmEx, have agreed to settle.
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