American Express Company reported first-quarter income from continuing operations of $443 million, down 58 percent from $1 billion a year ago. Net income totaled $437 million for the quarter, down 56 percent from a year ago. Consolidated total revenues net of interest expense declined 18 percent to $5.9 billion, down from $7.2 billion a year ago.
“We made very good progress this quarter on each of our key priorities – to stay liquid, to stay profitable, and to selectively invest for growth,” said Kenneth I. Chenault, chairman and CEO. “We continue to be very cautious about the economic outlook and plan to initiate additional reengineering efforts in the second quarter to help further reduce our operating costs. Our goal is to remain in a position to generate profits in excess of our dividend and be able to take competitive advantage of opportunities as the economy begins to rebound.
“At a time when some parts of the card industry were incurring substantial losses, we remained solidly profitable thanks, in part, to our flexibility in adapting to a very difficult economic environment and the diversity of our business model," Chenault continued. "Strong contributions from merchant services and bank card processing on our network continued to provide us with a competitive advantage. "
American Express generated earnings of $443 million, despite substantial additions to its lending reserves and slower cardmember spending in the quarter. “Spending levels reflected the severe recessionary environment, but remained fairly consistent throughout the quarter,” Chenault said.
American Express authorized more than $63 billion in U.S. charge card spending, and, at the end of the quarter, had $207 billion of open credit lines available to consumer and small businesses in the U.S.
“We diversified our funding activities by raising $3.5 billion of new deposits and ended the quarter with $25 billion of excess cash and marketable securities on hand. Based on current market conditions and the success of this program, we plan to continue funding our 2009 activities primarily through deposits,” Chenault said.