The largest U.S. credit card issuer American Express (AXP) announced the fiscal year 2012 first quarter earnings report on Wednesday. The report shows that American Express realized a first-quarter net profit of $1.26 billion, or $1.07 per share up 6.7 percent compared with $1.18 billion, or $97 cents a year ago, primarily thanks to growth in spending by customers, as well as the default rate hit its lowest level in the industry. AXP generated $7.6 billion for the first quarter, an increase of 8 percent compared with a year ago. The financial results also exceeded Wall Street analyst average estimate of $1.01 per share, according to the survey by Bloomberg.
American Express announced on March 26 that the company will raise its quarterly dividend by 11 percent to 20 cents per share. The company also said it may repurchase shares worth up to $5 billion in the next year, of which $4 billion will be implemented in 2012.
American Express stock price fell 0.24 percent, or $0.14, to end at $58.04 on the New York Stock Exchange in the regular trading. So far this year, American Express stock price has risen 23 percent and the AEP stock is ranked fourth among the Dow Jones Industrial Average composition shares, just following Bank of America (BAC), JP Morgan Chase (JPM) and Home Depot (HD).