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Credit card behemoth American Express (AXPFree American Express Stock Report) has released fourth-quarter results that were in line with our expectations. For the period, the Dow-30 component registered revenues of $8.5 billion and share net of $1.21. The bottom-line tally was 11% better than the year-earlier figure and included $0.04 of litigation-related costs. Without that charge, our estimate  of $1.25 was right on the mark.

Overall, the quarter was the latest in a string of good results. Cardmember spending continued to head higher, as did net interest income. Furthermore, the provision for loan losses totaled $528 million, or 17% lower, year over year. Credit quality remained very high, and loan losses were at very manageable levels, which we attribute to Amex's affluent customer base.

The fourth-quarter earnings release caps a banner year for American Express. Share earnings for the whole of 2013 expanded 11%, while the stock price registered an impressive gain of almost 58%. The equity's performance exceeded the return of the major market benchmarks and all other Dow components except aircraft manufacturer Boeing (BAFree Boeing Stock Report).

Looking ahead, our outlook for American Express remains rosy. Although economic concerns still abound, most recently on the domestic jobs front, we expect that cardmember spending will continue to increase at a solid rate over the next several years. On that note, Amex's customers generally possess good credit scores, so healthy spending patterns ought to persist, and loan losses should remain in check. Continued, gradual improvement in the U.S. housing market would likely further benefit the company's top and bottom lines.

For 2014, at this time, we are keeping our financial expectations intact, and look for share earnings of $5.30, or 9% better than 2013's tally. Further out, we project that earnings will exceed $6.50 a share by the 2016-2018 time frame.

As for the equity, as mentioned, it has performed remarkably well over the past year, but we still believe that it would make a fine addition to equity portfolios with a conservative, long-term approach.

About The Company: Established in 1850, American Express Company has grown to become a leading global payments, network, and travel firm. It operates through multiple business segments, including the Global Consumer Group and Global Business-to-Business Group. The company sold its AMEX Life business in October of 1995 and its American Express Bank in February of 2008. In mid-1994, it spun off Lehman Brothers to shareholders and ten years later, did the same with American Express Financial Advisors.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.