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American Express Soars on Q3 Results

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American Express Soars on Q3 Results

Alongside a number of other financial institutions, American Express (NYSE:AXP) also known as AmEx, reported its third-quarter following the market close on Wednesday. Early in the session on Thursday shares of the company traded significantly to the upside. The company reported 2013 operating earnings per share of $1.25. The result comfortably surpassed both consensus estimates of $1.22 and the year-ago quarter earnings of $1.09 a share. As a result, net income from operations rose 9% year over year to $1.37 billion from $1.25 billion in the year-ago period. Global card spending, continued to witness improvement in the U.S. and beyond climbing 7% year over year to $236.2 billion. The increase was a result of international cards-in-force that escalated 7% year over year to $78.0 billion, whereas cards-in-use improved 8% in the U.S.

On the topline total revenues, net of interest expenses, came in at $8.3 billion, up 6% year over year and 7% on constant currency basis. The year-over-year upside in revenues was helped by strong growth in card spending, net interest income and the loan portfolio. Further, delinquency rates, partially offset by lower lending balances. Provisions for losses were $492 million, edging up 3% from $479 million in the prior-year quarter.

American Express total expenses increased 5% year over year to $5.81 billion in the reported quarter. This primarily reflected 8% rise in card member rewards, marketing and promotion expenses and 15% surge in professional services. U.S. Card Services reported a net income of $782 million, up 12% from $699 million in the prior-year quarter. Total revenue, net of interest expenses, increased 6% to $4.3 billion from $4.1 billion in the year-ago quarter.

Shares of American Express were up by 3.8 percent to $79.25 at the time of this writing. The S&P 500 was up by 6 and a half points.

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