American Express Profit Up 24%, Meets Forecasts
American Express said stronger holiday shopping and a reduction in bankruptcy write-offs helped lift fourth-quarter profit by 24%, though it reported revenue below analysts' projections.
The New York-based financial and travel services company said net income increased to $922 million, or 75 cents a share, from $745 million, or 59 cents a share, a year earlier.
The year-ago period included results before the sale of its banking business in Brazil. Excluding that business and other discontinued operations, the company reported profit rose to $925 million, or 76 cents per share quarter, from $751 million, or 60 cents per share, a year earlier.
This matched Wall Street projections for earnings of 76 cents per share, according to analysts polled by Thomson Financial.
Total revenues rose about 13% to $7.21 billion - helped by a 41% jump in lending revenue to $990 million - but fell short of a $7.33 billion Thomson estimate.
The number of outstanding American Express and related cards rose by 1.5 million during the quarter.
"Our strong revenue and earnings this quarter were driven by record cardmember spending during the holiday shopping season and continued growth in our loan portfolio," said Chairman and Chief Executive Kenneth I. Chenault in a statement.
The results included $64 million in costs related primarily to restructuring initiatives throughout the company, which was about even from the year-ago period. The quarter also included a $68 million pretax gain related to the rebalancing of its investment portfolio.
Credit card issuers including Capital One Financial and JPMorgan Chase have reported solid
results from their card operations, helped by low default rates. American Express has performed better than many rivals as marketing partnerships helped boost market share.