AmEx profits soar, but shares fall

NEW YORK (CNNMoney.com) -- American Express reported a huge jump in quarterly profits Thursday that beat Wall Street estimates, but wary investors drove the stock lower in after-hours trading.

AmEx (AXP, Fortune 500) shares were down 2% in after-hours trading. The financial services company said its net income for the second quarter rose to $1.02 billion, from $337 million in the same period last year.

AmEx earned 84 cents a share in the latest quarter, up from 9 cents a year earlier. Analysts polled by Thomson Reuters had expected earnings of 78 cents per share.

Sales for the New York-based firm, net of interest expense, were $6.86 billion, up 13% from $6.1 billion a year ago. That beat analysts' forecast of $6.84 billion.

Though the results for the second quarter were upbeat, chief executive Kenneth Chenault warned that AmEx customers, like other Americans, are deleveraging their debt as they focus on buying only what they can afford.

"Today's cardmembers are borrowing less and paying down more of their outstanding debt," Chenault said in a prepared statement. "Over the last several quarters, this has translated into lower interest revenue."

Chenault said the company remains cautious about economic conditions, as well as Wall St. reform and difficult year-over-year comparisons in the second half of 2010.

In a conference call, chief financial officer Dan Henry also commented on changes in customer behavior and new legislation.

"It will be interesting to see how those customers react if [companies] have to put fees on debit products," Henry said. "There's a lot of scenarios out there, and we'll have to see how that plays out over time."