American Express, the largest charge card issuer, said profits surged to $687 million from $298 million a year ago. Last year's profit included special charges related to Sept. 11

Still, the company, which has been suffering through the market slump, reported the highest revenue and income in seven quarters, analysts said, beating estimates.

"The likelihood of a double-dip is slim, and we're seeing some of that in American Express's numbers," said Richard McCaffery, an analyst at Morningstar.

American Express is seen as a window into the nation's consumer spending patterns. When people lose their jobs or feel threatened financially, they can either cut their spending or stop paying their bills.

Neither of those problems hurt American Express in the three months ending in September. Consumer spending increased 10%, while the company decreased its loss reserves by just 8.5% to $939 million, reflecting fewer loan defaults.

The loss rate "tends to move with the unemployment rate," Gary Crittenden, the chief financial officer of American Express, said on a call with analysts. "As we've seen some improvement in unemployment, we've seen improvement in our loss rates."

Analysts believe American Express' numbers suggest there's still hope for an early economic recovery since the record rate of mortgage refinancing has spurred and sustained consumer spending.

"We're starting to see the higher end of the credit spectrum improving slightly," said Jennifer Scutti, an analyst at CIBC World Markets, who attributed part of that improvement to mortgage refinancing and debt consolidation.

Profit in American Express' travel-related services surged to $553 million, from $248 million a year ago.

At American Express Financial Advisors, which runs mutual funds that have been pummeled by the stock market, profits climbed at a more modest pace, gaining 4.8% to $152 million. At American Express Bank, the smallest piece of earnings for the company, profits were $25 million, compared to a loss of $43 million a year ago.

Crittenden said the firm was "still dealing with a difficult economy and volatile equity markets." Still, he said American Express, which has cut 13,800 jobs, or 16% of its staff since the end of 2000, is "better-positioned to operate in a difficult environment."

American Express maintained its profit outlook for the year, at $2.01 a share. The company said it would take some of its savings and reinvest them in marketing and promotions.

Shares of the charge card company, which have fallen 4% so far this year, rose $1.12 to $34.25.