American Express (AXP) posted lower profit in the last three months of 2016 than analysts expected as CEO Kenneth Chenault boosted promotional spending by 35% to replace some of the revenue lost with the Costco portfolio.
Earnings of 91 cents a share compared with the 98-cent average estimate from analysts surveyed by FactSet, while the New York-based company said net income dropped 8% from a year earlier to $825 million.
“Our underlying business performance gave us the flexibility to significantly ramp up marketing and promotion initiatives that have been targeted to provide a mix of returns over the short, medium and longer term,” Chenault said in a statement.
