(Reuters) - Credit card issuer American Express (NYSE:AXP) Co's quarterly profit beat analysts' estimates on Thursday, as it spent more on its rewards program boosting customer spending.
Shares of the New York-based company were up 2 percent.
AmEx has been bolstering its rewards programs and relying on partnerships to get customers to spend more. Last year, it renewed partnership with Delta Air Lines Inc (NYSE:DAL) that brought in over a million customers over the past two years, the company said.
The rewards program helped push quarterly card customer spending up 4 percent from a year ago.
Total expenses in the quarter went up 11 percent at $7.6 billion, while the company spent $2.46 billion on card rewards, up 4 percent from last year.
AmEx also expects its marketing expenses to rise by $200 million in the year on Delta partnership, as it tries to combat stiff competition for customers from big rival banks, including JPMorgan Chase & Co (NYSE:JPM) and Citigroup Inc (NYSE:C).
The company missed quarterly revenue estimates for a second straight quarter even though total revenue, excluding interest expense, rose 7 percent to $10.36 billion.
Revenue was hurt by flat growth in its global merchant and network services unit, compared to a year ago, the company said.
Meanwhile, net income fell to $1.55 billion, or $1.80 per share, in the first quarter ended March 31, from $1.63 billion, or $1.86 per share, a year earlier https://reut.rs/2VQDifq.
Excluding items, the company earned $2.01 per share, ahead of analysts' expectations of a profit of $1.99 per share.