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(Bloomberg) -- American Express Co. profits increased 12% as well-heeled consumers spent more than analysts expected on their credit cards over the holidays, a tailwind the firm said it expects will continue.
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Billed business, or the transaction volume on credit cards and other products issued by the firm, rose 8% to $408.4 billion in the fourth quarter. Fourth-quarter net income of $2.17 billion, or $3.04 a share, slightly missed estimates.
“We exited the year with increased momentum, with billings growth accelerating to 8% in the fourth quarter, driven by stronger spending from our consumer and commercial customers during the holiday season,” Chief Executive Officer Steve Squeri said in a statement Friday. “We maintained our best-in-class credit performance and disciplined expense management throughout the year.”
Full-year revenue is expected to increase between 8% and 10%, the firm said. That growth is intrinsically tied to billings, Squeri said in an interview, so if spend growth continues as it did in the fourth quarter, Amex will hit the high end of the revenue guidance.
Shares of the New York-based company fell 1.4% to $321.32 at 9:34 a.m. in New York. They’ve gained 73% in the past 12 months.
“There’s some euphoria in the economic environment in the United States right now,” he said. “The dollar is very, very strong.”
Given that strong dollar, Squeri expects many US-based travelers will go abroad this year.
During the year, Amex continued to invest in its offerings for clients who spend heavily on hospitality and travel, striking a deal for the restaurant- and event-focused platform platform Tock in June and refreshing its Gold card in July to add a $100 annual statement credit for Resy-linked restaurants in the US. Co-brand card partner Delta Air Lines Inc. said in November that the payments the airline receives from Amex for loyalty points to award to members is on track to reach $10 billion each year in the long term.
Amex announced last week that it will pay about $230 million to resolve long-running federal probes into its sales practices around products for small-business owners. Amex said that in addition to discontinuing the products in question, it took disciplinary action against those involved, undertook internal reviews and boosted compliance programs.