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American Express says COVID-19 hits cardholder spending

American Express says the COVID-19 pandemic has impacted cardholder spending and will force it to pare down costs. 

The company reported adjusted earnings of $1.98 per share, which fell within range of its revised estimates of $1.90 to $2.10 predicted in a mid-March update. 

Revenue fell 1%, to $10.3 billion in the quarter, compared with $10.4 billion a year ago, reflecting reduced cardholder spending that began in late February. 

"Our results in January and February continued the strong trends we've seen over the past 10 quarters, but we're now operating in a very different world," Stephen Squeri, chairman and CEO, told analysts during a quarterly investor call Friday morning. "The deterioration in the economy due to COVID-19 impacts that began during the first quarter and accelerated in April has dramatically impacted our volumes."

The company is aggressively reducing costs across various businesses and selectively investing in initiatives deemed critical to its long-term growth. The company is committed to no layoffs and has workers operating remotely to keep them safe.

The company also raised its provisions for losses to $2.6 billion, compared with $809 million a year ago. First quarter net income fell to $367 million, or 41 cents a share, compared with net income of $1.6 billion, or $1.80 in the year-ago period. 

Revenue fell 1% to $10.3 billion in the quarter, compared with $10.4 billion a year ago.

Cover image: American Express