Citing lower per-customer spending and higher charge-offs, American Express Co. yesterday reported a 48% drop in second-quarter net income, to $337 million from $653 million during the same period a year ago. Total revenues declined by 18.7% to $6.1 billion from $7.5 billion. AmEx's U.S. Card Services unit reported a $200 million loss for the quarter ended June 30, compared with net income of $21 million a year ago.Sales volume in the U.S. totaled $84.1 billion, down 15.9% compared with $100 billion a year ago, while the number of basic cards in force declined by 9.7% to 29.8 million from 33 million, as AmEx closed thousands of inactive accounts during the quarter. AmEx's provision for loan losses was $1.2 billion, down 20% from $1.5 billion the issuer set aside a year ago. Managed U.S. receivables averaged $54 billion, down 16.5% from $64.7 billion a year ago. AmEx wrote off 10% of its U.S. receivables, up sharply from 5.3% a year ago. AmEx's International Card Services unit reported second-quarter net income of $64 million, down 44.3% from $115 million. AmEx attributed the decline to reduced card spending in most regions around the world. Sales volume for international cards declined 19.8%, to $22.7 billion from $28.3 billion. AmEx reported 10.8 million international cards in force as of June 30, down 6% from 11.5 million a year earlier. AmEx set aside $302 million for loan-loss reserves for the international cards unit, up 24.8% from $242 million a year ago. Managed international receivables averaged $8.9 billion during the quarter, down 24.6% from $11.8 billion a year ago. The charge-off rate on international loans was 7.5% of international receivables compared with 4.5% a year ago. AmEx's Global Commercial Services unit contributed income of $71 million for the quarter, down 68.7% compared with $227 million a year ago. The company attributed the drop to reduced spending on corporate cards and to lower travel commissions and fees. Sales volume fell 23.2%, to $27.2 billion compared with $35.4 billion a year earlier. The number of cards in force in the global cards unit edged up 2.9%, to 7.2 million from 7 million, helped by AmEx's acquisition last year of General Electric Co.'s GE Money Corporate Payment Services business. The company's Global Network and Merchant Services unit reported income of $236 million, down 21.1% from $299 million a year ago. Sales volume for the global cards unit fell 16.3%, to $151.4 billion from $180.9 billion a year ago. The sharp decline in consumer spending AmEx has reported for most of this year moderated somewhat in June, Kenneth Chenault, AmEx chairman and CEO, said in a statement. "Although it is still too early to point to any sure signs of an economic recovery, the number of cardmembers who are falling behind in their payments, the volume of bankruptcy filings and the level of loan write-offs were better than we had expected," he said.

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