American Express Co. reported a large drop in profit from a year earlier as the credit-card company logged provisions of $1.6 billion to cover potential losses.
That provision rose from $861 million a year earlier and the increase “primarily reflected the deterioration of the global macroeconomic outlook,” American Express said. The company said the Covid-19 pandemic significantly affected results in the quarter.
“Spending volumes, which declined to their lowest point this quarter in April, gradually improved in May and June, with small businesses being the most resilient,” Chief Executive and Chairman Stephen Squeri said in prepared remarks.
The company said net income for the quarter was $257 million, down from $1.76 billion in the comparable quarter last year. Earnings tumbled to 29 cents a share, down from $2.07 a share.
Total revenue, net of interest expense, fell 29%, the company said, to around $7.68 billion. According to FactSet, analysts expected $8.1 billion.