April 23 (Reuters) - American Express Co exceeded quarterly profit estimates on Friday as it released more than $1 billion worth of funds it had set aside to cover potential coronavirus loan losses.
The outlook for card companies is improving as government stimulus and vaccine rollouts fuel a global economic recovery, helping the industry recover from a pandemic-driven slump in non-essential consumer spending last year.
“We view 2021 as a transition year, where we are focused on making investments to rebuild growth momentum in our core business, Chief Executive Officer Stephen Squeri said in a statement.
The credit card issuer posted a benefit of $675 million in the first quarter from the release of $1.05 billion from its loan-loss reserves. It had built reserves of $1.7 billion a year earlier.
Net income rose to $2.2 billion, or $2.74 per share, from $367 million, or 41 cents per share a year earlier. Analysts had expected a figure of $1.61 per share, according to Refinitiv IBES data.
AmEx’s total revenue, excluding interest expense, fell 12% to around $9 billion.
Reporting by Sohini Podder in Bengaluru; Editing by Aditya Soni