(Reuters) - Credit card issuer American Express Co (N:AXP) reported a 5 percent fall in quarterly profit as a stronger dollar reduced revenue from markets outside the United States.
The company's net income attributable to common shareholders declined to $1.44 billion, or $1.42 per share, in the second quarter ended June 30, from $1.52 billion, or $1.43 per share, a year earlier.
However, the decline was smaller than expected as analysts had estimated earnings per share at $1.32, according to Thomson Reuters I/B/E/S.
Total revenue, net of interest expense, fell 4 percent to $8.28 billion, dragged by a 9.6 percent decline in revenue from card services from markets outside the United States.
AmEx gets about a sixth of its card services revenue from outside the United States.
The dollar has gained about 21 percent against a basket of major currencies in the past 12 months.
The company's U.S. Card Services business reported a 6 percent rise in revenue to $4.7 billion, net of interest expense.
Costs at this business rose 4 percent to $3 billion, partly driven by expenses from previously renewed co-brand partnerships, the company said.
There is stiff competition in the industry to bag prominent "co-brand" deals, in which card issuers team up with prominent corporate partners - often supermarkets or airlines - to sell cards.
AmEx, whose brand image relies on catering mainly to wealthy corporate clients, has lost a couple of lucrative co-brand contracts this year because it charges higher prices than rival card issuers.
AmEx's exclusive tie-up with Costco (O:COST) in the United States will be given over to Citigroup (N:C) and MasterCard Inc (N:MA) in March. The deal accounted for 8 percent of spending on AmEx cards in 2014.
The company said in February that the loss of the U.S. Costco contract would hurt earnings for the next two years.
The company also ended a co-branded deal in the first quarter with JetBlue Airways Corp (O:JBLU). The contract was picked up by Barclays Plc (L:BARC) and MasterCard.