Des Moines (Iowa): American Express Co. said Thursday its earnings fell 48 percent in the second quarter, but the credit card lender reversed the recent trend of quarterly losses to post a profit.
The New York-based company said it earned USD 337
million, or 9 cents per share. That compares with earnings of
USD 653 million, or 56 cents per share, a year earlier.
The results included an 18 cents per share cost of buying
back preferred shares from the U.S. Treasury.
Excluding that cost, earnings were 27 cents per share.
Revenue fell 18 percent to USD 6.09 billion from USD 7.46
billion a year ago.
Analysts surveyed by Thomson Reuters expected 26 cents a
share on revenue of USD 6.29 billion. Analysts typically
exclude one-time costs in their estimates.
Non interest revenue fell 18 percent to USD 5.35 billion
and interest income was down 31 percent to USD 1.29 billion.
In after-hours trading, shares fell USD 1.19, or 4
percent, to USD 28.26, after rising 2.4 percent, or 69 cents,
to close at USD 29.45 in the regular session. They've traded
between USD 9.71 and USD 41.80 in the past year.
The company set aside USD 1.6 billion for loan losses
compared with USD 1.8 billion a year ago, reflecting lower
average loans, but that was offset by higher write-offs.
Loan write-offs increased to 10.3 percent, up from 5.8
percent a year ago.
Expenses fell 16 percent to USD 4.1 billion.
CEO Kenneth Chenault said despite historically high
levels of loan losses and weakness in cardholder spending, the
company turned a profit and strengthened its capital base.
"Given the cutbacks in discretionary spending among
affluent consumers, small businesses and corporations, our
overall level of billed business is performing well relative
to most of the other major card issuers," he said.
He said the decline in cardholder spending has moderated
somewhat in June. It's too early to say that points to a
recovery, but he said the number of cardholders falling behind
on payments, bankruptcy filings and the level of loan
write-offs came in better than expected.
Bureau Report
First Published: Friday, July 24, 2009, 17:37