AmEx earnings beat estimates

By Juan Lagorio

NEW YORK (Reuters) - American Express (AXP.N), reported better-than-expected earnings on Thursday as it slashed costs, and said it intended to repay government bailout funds as soon as regulators allow, sending its shares up 6 percent.

The company said it expects another round of cost cutting in the second quarter, which follows efforts in October to cut costs by $1.8 billion (1.2 billion pounds) through eliminating 7,000 jobs and lowering marketing and advertising expenses.

"We continue to be very cautious about the economic outlook," said Ken Chenault, chairman and chief executive, in a statement.

In February, the company took the unusual step of offering $300 to U.S. card holders to pay off their balances and close their accounts, in an effort to reduce its credit risk.

Those efforts may have contributed to the 16 percent decline in spending volume on its cards.

American Express long catered mainly to wealthy consumers, but earlier this decade it began reaching out to a wider range of clients, resulting in rising loan losses.

In the first quarter, net income available to common shareholders fell to $361 million, or 31 cents per share, compared with $985 million, or 85 cents per diluted share, in the same quarter last year.

Excluding an after-tax gain of $136 million from legal settlements with Visa (V.N) and MasterCard (MA.N), the company posted earnings of 20 cents per share, beating analysts' average forecast of 14 cents, according to Reuters Estimates.