American Express Co , reported on Thursday sharply lower first-quarter earnings, as the fourth-largest U.S. credit card company struggled with higher bad loans, and set aside more money to cover those losses.

In the first quarter, net income available to common shareholders fell to $361 million, or 31 cents per share, from $985 million, or 85 cents per diluted share, a year earlier.

Earnings from continuing operations sank to $443 million, or 32 cents per diluted share, from $1.04 billion, or 90 cents per diluted share, in the same quarter last year.

Consolidated revenue fell 18 percent to $5.9 billion, but consolidated expenses fell 22 percent to $3.6 billion, helped by a restructuring plan.

In the U.S. card service business, net charge-offs -- a measure of bad loan write-offs -- rose to 8.5 percent from 7.0 percent in the previous quarter.

American Express shares rose 4.9 to $22 in after-hours trading after closing at $20.97, up 7.93 percent on the New York Stock Exchange. The company's stock has risen 12 percent in 2009.

(Reporting by Juan Lagorio; Editing Bernard Orr)