Growth in the cards for American Express
Chairman and CEO Kenneth Chenault affirms the company's earnings outlook for 2008, sending shares sharply higher.
NEW YORK (CNNMoney.com) -- American Express CEO Kenneth Chenault said Wednesday he still expected the credit card company to deliver earnings growth of 4% to 6% this year, even amid rising credit losses.
The news helped send American Express (AXP, Fortune 500) shares 6% higher in midday trade.
Speaking at the Keefe, Bruyette & Woods Diversified Financial Services Conference in New York, Chenault reiterated the earnings outlook he issued when the company reported its first-quarter earnings in late April. He did say though that the current economic climate would make reaching that goal more difficult.
"This is a tough, uncertain environment," he said.
Chenault also warned that he expected writeoffs to be higher in the second quarter than in the first. Last quarter, American Express set aside $1.27 billion for credit losses, up 48% from the same period a year ago.
Major credit card issuers like American Express as well as Discover (DFS), Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) have ramped up their loan loss reserves in recent months as more and more consumers begin defaulting on their credit card payments. 
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