American Express Co (>> American Express Company) posted a lower-than-expected quarterly profit on Thursday as the credit card issuer boosted spending on marketing and promotion to fend off rising competition.
The company said it now expects full-year 2017 earnings to be between $5.60-$5.80 per share. AmEx had previously expected to achieve at least $5.60 per share in 2017.
"That outlook is built on a set of priorities designed to put us in a strong position for 2018 and the years ahead," Chief Executive Kenneth Chenault said.
AmEx's stock has rallied since the U.S. election as investors hope Trump will usher in a new era of looser bank regulations along with economic growth which should drive increased spending among AmEx customers.
The company's shares were down marginally in after-hours trading.
Net income attributable to common shareholders fell to $825 million, or 88 cents per share, in the fourth quarter ended Dec. 31, from $899 million, or 89 cents per share, a year earlier.
Total revenue, net of interest expense, fell to $8.02 billion from $8.39 billion last year.
Analysts on average had estimated a profit of 97 cents per share, according to Thomson Reuters I/B/E/S.
AmEx, which has long catered to affluent customers, has struggled since the loss of a lucrative partnership with Costco Wholesale Corp (>> Costco Wholesale Corporation). The portfolio accounted for about 8 percent of the spending on AmEx cards in 2015.
Up to Thursday's close, AmEx stock had risen about 15.5 percent since the U.S. election.
(Reporting by Nikhil Subba in Bengaluru; Editing by Shounak Dasgupta)