Consumer spending burdens: Corona crisis causes American Express profit to collapse – share undecided | message

—In the first quarter, earnings dropped 76 percent year-over-year to $ 367 million, the US financial firm said on Friday. The spread of the virus had a heavy impact on consumer spending from the end of February, said American Express, which earns fees for card payments.

In addition, American Express increased its credit risk provisioning 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 downturn in the wake of the Corona crisis accelerated in April and “dramatically” affected the transaction volume.

American Express is aggressively cutting costs in the face of burdens across all businesses, Squeri said. The stock initially reacted positively, analysts had expected an even bigger slump in earnings. Total revenue decreased 1 percent to $ 10.3 billion in the first quarter, largely due to the strong dollar that reduced foreign revenue.

American Express stock eventually gained 0.86 percent to $ 83.17 in NYSE trading, while it was initially in the red.

NEW YORK (dpa-AFX)