American Express (AXP) on Wednesday reported earnings of $1.3 billion in the first quarter of the year, aided by aggressive cost-control efforts and by high repayment rates on its credit cards.
The New York credit card issuer said that its revenues net of interest expenses rose by 4% from the same quarter a year earlier, and its net income climbed by 2%.
Earnings per share were up 7% to $1.15, which surpassed the $1.12 consensus estimates of analysts surveyed by Bloomberg.
AmEx said that total loans climbed 3.6% year over year. The entire credit-card industry has been experiencing sluggish loan demand, which has been partially offset by historically low delinquency rates.
"We are off to a strong start in 2013, thanks to our ability to grow revenue in a slow growth economy, control expenses and maintain a strong balance sheet," Chief Executive Kenneth Chenault said Wednesday in a news release.
The slow-growth environment was the backdrop for American Express' announcement in January that it planned to lay off 5,400 employees. In the first quarter, the company's expenses were $5.5 billion, up just 1% from the same period a year earlier.
"Progress on cost control initiatives allowed us to continue to make investments to grow the business," Chenault stated, "while holding operating expenses well within our target of less than 3 percent annual growth for the next two years."
AmEx's U.S. credit card business saw a 7% increase in net income in the first quarter, driven in part by an 8% increase in customer spending.
But the company's domestic credit-card results were partially offset by a 10% decrease in the profitability of its international credit card business. The international business was hurt by sluggish revenue growth and smaller reserve releases as compared to a year ago.
