American Express announced it will be temporarily suspending its buyback program after the recent tax overhaul.
In the company's earnings release Thursday, CEO Ken Chenault said AmEx will suspend its buyback program for the first half of the year. The CEO said the company made this decision to rebuild its capital because of the upfront charge triggered by the new tax law.
Including the impact from the recent tax legislation, American Express reported a net loss of $1.2 billion or $1.41 per share in the fourth quarter. In the year-ago quarter, the company reported a net income of $825 million or 88 cents per share.
Chenault said, however, that the company will continue to pay its quarterly dividend. Chenault said he believes the new tax law will ultimately have a positive effect on both the U.S. economy and the company.
American Express also reported quarterly earnings and revenue that beat analysts' expectations on Thursday.
Here's how the company did, compared with what Wall Street expected:
The company's stock dipped more than 2 percent after it released its filing with the Securities and Exchange Commission.
Other companies have also reported sizable losses, citing a one-time charge from the new tax law. Citigroup, for instance, reported a charge of roughly $19 billion in the company's recent quarterly earnings statement. Bank of America posted a $2.9 billion charge relating to the new law. And J.P. Morgan Chase took a $2.4 billion hit from the law.
That one-time charge mandated by the Tax Cuts and Jobs Act of 2017 led to American Express' first quarterly net loss in more than two decades.
In October, the company announced that Chenault would be retiring in February. Chenault will be succeeded by current Vice Chairman Stephen Squeri.
Berkshire Hathaway's legendary value investor and longtime AmEx stakeholder Warren Buffett praised Chenault's impact on the company.
"Ken built on its storied history — not by abandoning traditional strengths, but by building on them and adding new ones," Buffett said.
The company is expected to benefit from the tax reform legislation recently passed by congressional Republicans and the Trump administration. In its first analyst report on the financial services giant, Deutsche Bank gave AmEx a "buy" rating due in part to the anticipated effects of tax reform and deregulation.
This is breaking news. Please check back for updates.