NEW YORK – American Express Co.'s first-quarter profit slipped six per cent as the credit card lender saw more U.S. cardholders fail to make their payments, it said today.

Like other lenders, the New York-based company has been writing off more loans as unpaid as U.S. borrowers struggle with rising costs, slumping home prices, and a less certain job market. However, cardholder spending continues to climb, and strong business abroad has been helping to offset much of the credit problems at home.

Net income totalled US$991 million, or 85 cents a share, for the first three months of the year. That's down from a profit of $1.06 billion, or 87 cents, in the same timeframe last year. But the result – and the earnings-per-share of 84 cents from continuing operations – was above the average analyst forecast of 81 cents per share.

The company's total provisions for credit losses amounted to $1.27 billion, a 48 per cent increase from the first quarter of 2007.

"While we continue to be cautious about the U.S. economy, we are encouraged by our performance internationally," said chairman and chief executive Kenneth Chenault in a statement. He also said the company still expects four per cent to six per cent earnings-per-share growth for the year, as it indicated back in January, "barring significant deterioration in the economic environment."

American Express shares rose more than three per cent in after-hours trading, having closed Thursday up 80 cents at $45.18. The company's stock has sunk nearly 13 per cent since the start of the year, but has rebounded from four-year lows touched in early March.

Quarterly revenue climbed 11 per cent to $7.2 billion, in line with analysts' estimates.

U.S. card services profit fell 19 per cent to $523 million in the first quarter from $644 million in same period a year earlier. Profit from international card services rose 30 per cent to $133 million, compared with a profit of $102 million a year earlier.

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