American Express Co., which specializes in travel services and credit cards, said Monday that its net income rose 17 percent in the third quarter on strong growth in its domestic and international card units.
Net income for the July-September period totaled $1.03 billion (Ђ860 million), or 82 cents a share, up from $879 million, or 69 cents a share, a year earlier.
Excluding results from two units it spun off in the quarter _ its Minneapolis-based Ameriprise Financial Inc. advisory service and its tax and business services unit _ net income in the quarter was $865 million (Ђ724 million), up 22 percent from $702 million a year earlier. That translated to earnings of 69 cents per share in the third quarter, up from 55 cents a year earlier.
In afternoon trading, American Express shares rose $1.39, or nearly 3 percent, to $48.54 on the New York Stock Exchange. Its shares have traded in a 52-week range of $37.94 to $51.48.
American Express, which is headquartered in New York, said revenue for the quarter was $6.1 billion (Ђ5.1 billion), up from $5.5 billion a year earlier.
The company also set aside $49 million (Ђ41 million) to cover costs associated with Hurricane Katrina, the storm that devastated the Gulf Coast on Aug. 29.
Kenneth I. Chenault, chairman and chief executive officer, said in a statement accompanying the report that the third-quarter performance "underscores the strength and momentum of an American Express that is now focused on the global payments business."
He said that spending on American Express cards rose 18 percent in the quarter, "reflecting a double-digit rise in average card member spending and the addition of 5.7 million cards during the last year."
Net Income for the U.S. card services unit totaled $446 million (Ђ373 million) in the third quarter, up 25 percent from a year earlier. Profits in the international card and global commercial services were $254 million (Ђ213 million), up 14 percent from a year earlier.
But net income in the global network and merchant services unit was down 19 percent at $141 million (Ђ118 million). American Express noted that the year-earlier figures included results from its ATM business, which was sold in 2004, AP reported. V.A.