Operating Earnings Up at American Express

American Express Co. said operating earnings rose 18% in the first quarter after the company lured new customers by issuing cards through lenders such as Bank of America Corp. and Citigroup Inc.

Profit from continuing operations climbed to $876 million, or 70 cents a share, from $745 million, or 59 cents, a year earlier, New York-based American Express said. Revenue rose 12% to $6.33 billion.

American Express added 1.5 million cardholders in the quarter, bringing the total to 72.5 million, after Chief Executive Kenneth Chenault struck agreements to issue cards through some of the nation’s biggest banks.

Until a 2004 antitrust ruling by the Supreme Court, almost all banks were restricted to issuing Visa and MasterCard cards. Bank of America started issuing American Express cards in the U.S. after agreeing to buy MBNA Corp. last year. That purchase in January made Bank of America the biggest U.S. credit-card issuer.

Chenault shed American Express’s brokerage unit, now known as Ameriprise Financial Inc., in September and sold a tax-services unit a month later. As a result, the year-earlier profit from continuing operations excludes those two businesses.

Net income fell to $873 million, or 69 cents a share, from $946 million, or 75 cents, in the first quarter of 2005.

American Express was expected to report profit from continuing operations of 69 cents a share on revenue of $6.35 billion, according to the average estimate of analysts polled by Thomson Financial.

American Express shares fell 47 cents to $51.78.