American Express Co. reported revenue that beat analysts’ estimates after a marketing campaign showed signs of encouraging more card spending after the loss of key partnerships.
Revenue slipped 2.5 percent to $7.89 billion, exceeding the average estimate of $7.79 billion in a Bloomberg survey of 21 analysts. The drop was due to the loss of a deal with Costco Wholesale Corp. Excluding Costco from year-earlier results, revenue increased 6.2 percent, according to figures Amex disclosed in a statement on Wednesday.
Chief Executive Officer Ken Chenault, 65, has been shaking up management and reshaping divisions after Amex’s decision to part ways with Costco sparked the lender’s worst stock slump since the financial crisis. Amex boosted spending on marketing and sweetened rewards to keep customers after JPMorgan Chase & Co. introduced its Sapphire Reserve card last year, causing a temporary increase in attrition at Amex.
“The results reflect many of the investments we’ve been making to grow the business,” Chenault said in the statement. “The last couple of years have been an important transition period, and we’ve entered 2017 stronger, more focused and more resilient.”
The lender climbed 2.3 percent to $77.25 at 4:21 p.m. in New York.
Net income fell 13 percent to $1.23 billion, or $1.34 a share, from $1.43 billion, or $1.45, a year earlier. Expense for rewards increased about 6 percent to $1.81 billion.