By Nicole Bullock in New York

American Express on Thursday reported higher than expected earnings for the fourth quarter, concluding a record year marked by strong cardholder spending.

The company said net income was $1.2bn in the fourth quarter, up from $1.1bn in the year-ago period. Diluted earnings per share were $1.01, up 15 per cent from $0.88 cents a share in the fourth quarter of 2011 and beating analysts? expectations of $0.98 cents a share.

?Card members spent a record amount on their American Express cards, continuing a trend that has translated into overall share gains during the last two years,? said Kenneth Chenault, chairman and chief executive.

American Express cardholders spent record amounts in the quarter and the full year. Business billed to cards globally rose 11 per cent in the quarter to $219bn from $197.7bn a year ago, continuing a trend established in recent quarters. Full-year billed business was $822.2bn, up from $713.3bn in 2010.

Consolidated total revenues, net of interest expense, rose 7 per cent to $7.7bn in the fourth quarter from $7.2bn a year ago, below investors? expectations for $7.9bn. A decrease in net interest income from lower yields in the loan portfolio partially offset the record cardholder spending and higher travel commissions and fees.

For the full year, American Express reported record revenue and net income, up 9 per cent to nearly $30bn and up 22 per cent to $4.9bn, respectively.

Mr Chenault said revolving credit balances grew but at a much slower rate than spending, an indication card members were managing their finances more cautiously. Past-due loans and write-offs were at historically low levels. American Express caters to businesses and affluent cardholders.

Consolidated expenses totalled $5.6bn, up 1 per cent from $5.5bn in the year-ago period. That marks a significant reduction from the growth rates of recent quarters, reflecting lower marketing and promotion expenses and slower increases in both rewards costs and operating expenses.

Mr Chenault said American Express is starting 2012 from a ?position of strength? but acknowledged that ?the overall economy in the US remains uneven and the environment in Europe continues to pose challenges for the global economy?.

Ahead of the results on Thursday, American Express shares rose 0.8 per cent to $50.95 for an increase of 13 per cent in the past year. In after-hours trading, shares was down at $50.05.

? The Financial Times Limited 2012