Profits Fall at AmEx as it Builds its Loan Loss Funds

American Express Co. late yesterday reported its first quarter profit declined 6 percent to $991 million as the company set aside more for loan losses. Net revenues rose 11 percent to $7.2 billion.

The company earned 85 cents per share, down from 87 cents per share a year ago. Card-member spending increased 14 percent, driven primarily by international card members. Kenneth I. Chenault, AmEx chairman and CEO, said in a statement that AmEx remains cautious about the U.S. economy but is encouraged by the growth of its international business.

The U.S. Card Services division saw its profits fall nearly 19 percent to $523 million, from $644 million in the same period a year ago. Revenues increased 11 percent to $3.7 billion.

AmEx (NYSE: AXP) increased its loan loss provision for the division to $881 million, a rise of 52 percent. The company attributed the increase to a rise in write offs and delinquencies, along with an increase in loans outstanding.

AmEx completed last month its $1.1 billion purchase of the corporate card unit of GE Money.