American Express (NYSE: AXP) Q1 Earnings More Than Double On Strong Revenue, Shrinking Credit Costs

American Express (NYSE: AXP) announced Thursday that first quarter earnings more than doubled as revenue and volumes showed robust growth.  The credit card company also took a much smaller provision for loan losses at net charge-offs fell 7.2 percent from a year ago.

The company said it earned $873 million or 73 cents a share in the first quarter, up from $361 million or 31 cents a share in the same period a year ago.

Net revenues rose 11 percent in the quarter to $6.6 billion as cardmember spending increased 16 percent during the period.

“The biggest turnarounds in spending came from corporate cardmembers and banks who issue cards on our network,” said Chairman and CEO Kenneth I. Chenault. “Consumer and small business volumes also rose in part because of strength in travel, entertainment and other discretionary categories.”

Revenue at American Express’ U.S. Card Services unit rose 14 percent, while its international segment saw 9 percent growth.

“Our ability to generate strong volumes comes at a time when cardmembers are paying down their outstanding debt,” said Chenault. “This compares favorably to the major issuers who traditionally have had to rely on lending-oriented customers to generate billed business.

American Express set aside $943 million for defaults, down 48 percent from $1.8 billion last year.  The company said continued improvement in the quality of its credit portfolio allowed for the reduction.

The company’s 7.2 percent charge-off rate in the first quarter is the lowest amongst major credit card lenders.