American Express Profit Rises, Beats Expectations

American Expressreported a profit that more than doubled from a year ago on a per-share basis, helped by rising consumer spending and lower credit losses.

The credit card issuer, a component of the Dow Jones Industrial Average, reported earnings excluding one-time items of 59 cents a share in the fourth quarter, up from 57 cents a share in the same period a year ago.

Sales hit $6.49 billion. In the same period a year prior, sales came in at $6.141 billion.

Analysts who follow AmEx were expecting it to report a profit of 57 cents a share, according to a consensus estimate compiled by Thomson Reuters.


Despite topping what the Street was expecting, AmEx saw its shares edge down by less than 1 percent in extended trading Thursday.

The stock wrapped up the regular session on the New York Stock Exchange down almost 2 percent at $42.16.

American Express' shares rose more than 115 percent last year, handily outpacing the Standard & Poor's 500 index's increase of 23 percent, as it turned in earnings throughout the economic downturn and emerged as one of the stronger financial companies.

American Express suffered big credit losses in 2008 and 2009 after boosting its lending earlier this decade, but losses began stabilizing last year. The company is now looking to focus its efforts on charge cards, where customers have to pay off the balance every month.

In the most recent quarter, provisions for losses slid 47 percent to $748 million.

Another major credit card issuer, Capital One Financial also reported fourth-quarter earnings that beat analysts' forecasts.

The McLean, Virigina-based credit card issuer reported net income of $376 million or 83 cents per share, down from $393 million in third quarter 2009. Revenues were $4.4 billion, a 4.7 percent decrease from the same period in 2008.

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