Charge cards have been around for more than half a century, and pioneers like American Express (AXP 0.32%) were instrumental in beginning the move away from cash transactions toward more dedicated payment systems. Now, billions of credit, debit, and other charge cards are in customers' hands, and even though American Express isn't the largest player in the industry, it still has a brand and reputation that are unparalleled in their prestige and value to the financial institution.

Coming into last Thursday's first-quarter financial report, investors hoped that American Express would be able to deliver solid growth on both its top and bottom lines. AmEx's results were somewhat mixed, with solid profit growth but without the full extent of revenue gains that many had wanted to see.

American Express Serve cards and mobile app.

Image source: American Express.

Are customers leaving home without it?

American Express had first-quarter results that showed the cross-currents affecting the payment side of the financial industry right now. Total revenue was higher by 7% to $10.36 billion, although that growth rate was slightly weaker than what most of those following the stock had hoped to see. On the other hand, even though net income was down 5% to $1.55 billion compared to year-ago levels, the resulting adjusted earnings of $2.01 per share just barely edged over the consensus forecast among investors by $0.01 per share.

Fundamentally speaking, American Express seemed pleased with the conditions it faced. Adverse foreign exchange rates held the company back from what would've otherwise been 9% gains in adjusted revenue, and AmEx said that higher spending from its card members, higher loan volumes, and greater fee income all contributed to the gains.

However, on the expense side, AmEx had some challenges. Provisions for losses were higher by 4%, reflecting in part the rise in the company's loan and receivables portfolios, but also responding to higher write-offs in its outstanding loans. Higher customer engagement costs sent consolidated expenses up by double-digit percentages from year-ago levels, and litigation-related charges also had a negative impact on the card giant's bottom line.

Some of American Express' business segments did better than others. The strongest profits came from the global merchant and network services division, which saw a 22% rise in net income. Global commercial services also performed well, with higher spending playing the primary role in driving bottom-line performance. However, the global consumer services group suffered a 1% drop in segment earnings, due largely to higher costs related to member engagement.

CEO Stephen Squeri was generally pleased with how the company did. "We continued to expand our merchant network," Squeri said, "and added 3.1 million new proprietary cards in the quarter." The CEO pointed in particular to growth in billings internationally, where consumers, small business, and mid-sized business customers all appear to be doing well.

Can AmEx keep gaining ground?

American Express sees even better times ahead. A key driver of success for the quarter came with the extension of the card giant's partnership with Delta Air Lines (DAL -1.43%), which now represents AmEx's largest co-branded card collaboration. Squeri noted that the relationship has generated more than 1 million new accounts in just the past two years, and spending has risen at double-digit percentage rates annually over the past several years.

Nevertheless, there's no question that there's a huge amount of competition in the card space, and American Express will need to keep spending in order to maintain and build its market share. One of the reasons why the Delta news was so positive was that no one wanted to see a repeat of the debacle that led to the 2016 defection of Costco Wholesale (COST 1.00%) away from AmEx. Although the card giant has largely gotten over that episode in its history, it nevertheless had a monumental impact on its financials, and it's unclear whether AmEx could have taken a similar blow from Delta without leading to a substantial loss of confidence among shareholders.

American Express shareholders seemed happy with the report despite sluggish revenue numbers, and the stock climbed almost 2% on Thursday following the announcement. If it can keep holding its own in a crowded but fast-growing space, then American Express stands to get itself moving more aggressively toward a faster growth trajectory in the near future.