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In the first quarter, earnings fell 76 percent year-over-year to $ 367 million, the US financial company said on Friday. The spread of the virus has had a strong impact on consumer spending since late February, said American Express, which earns fees for card payments.
Additionally, American Express increased its credit risk provision from $ 809 million to $ 2.6 billion, which weighed heavily on the balance sheet. “We are now in a different world,” said CEO Stephen J Squeri. The economic recession following the Corona crisis accelerated in April and “dramatically” affected the volume of transactions.
American Express is aggressively reducing costs against charges at all companies, Squeri said. The stock initially reacted positively, analysts had expected a further drop in earnings. Total revenue decreased 1 percent to $ 10.3 billion in the first quarter, largely due to the strong dollar that cut foreign revenue.
American Express shares eventually gained 0.86 percent to $ 83.17 on the NYSE trade, while it was initially in the red.
NEW YORK (dpa-AFX)
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