AmEx posts lower-than-expected first-quarter revenue

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FILE PHOTO: An American Express credit card is seen on a computer keyboard in this picture illustration taken September 6, 2017. REUTERS/Philippe Wojazer/Illustration

(Reuters) – Credit card issuer American Express Co’s quarterly revenue missed analysts’ estimates on Thursday, due to muted growth in its global merchant and network services unit.

Shares of AmEx were down 1.2 percent in premarket trading.

Revenue growth in the unit, which operates a global payments network for processing and settling card transactions, remained flat at $1.6 billion compared to a year ago.

Total revenue, excluding interest expense, rose 7 percent to $10.36 billion, missing analysts’ estimates of $10.5 billion, according to IBES data from Refinitiv. AmEx missed revenue estimates for a second straight quarter.

Meanwhile, net income fell to $1.55 billion, or $1.80 per share, in the first quarter ended March 31, from $1.63 billion, or $1.86 per share, a year earlier reut.rs/2VQDifq.

The New York-based company, which has been bolstering its rewards program, said its total expenses in the quarter was $7.6 billion, up 11 percent from a year earlier.

Excluding items, the company earned $2.01 per share, ahead of analysts’ expectations of a profit of $1.99 per share.

Reporting by Bharath Manjesh in Bengaluru;