American Express Posts Lower Earnings, Revenue
January 19 2017 - 5:14PM
Dow Jones News
By Anne Steele
American Express Co. posted lower top- and bottom-line results
in the final quarter of the year, but the credit card company said
it has made progress in turning around its business.
Shares edged down 0.3% after hours to $76.50.
American Express has suffered from issues ranging from the loss
of its 16-year exclusive relationship with warehouse-club retailer
Costco Wholesale Corp., to heavy competition, to declines in
corporate travel budgets.
"At the start of 2016 we said we would move with a strong sense
of urgency to change the trajectory of our business," said Chief
Executive Kenneth Chenault. "The results we're reporting today
reflect substantial progress on that commitment."
Mr. Chenault said the company is ahead of plans to reset its
cost base and improve operating efficiency. American Express last
year said it would cut $1 billion in costs. On Thursday it said its
fourth-quarter expenses were 2% lower.
Mr. Chenault, who acknowledged "we continue to operate in a very
challenging environment," said card member spending grew 7% during
the quarter, excluding the impact of Costco in the year
earlier-period and the effect of the stronger U.S. dollar.
The company attributed the gains to continued strength in
international markets, accelerated growth among small and midsize
companies and strong long-term relationships with higher spending
consumers.
For 2017, the company forecast earnings of $5.60 to $5.80 a
share, bracketing analysts' estimates for $5.75 a share, according
to Thomson Reuters.
In all for the fourth quarter, American Express reported a
profit of $825 million, or 88 cents a share, down from $899
million, or 89 cents a share, a year earlier. Excluding
restructuring charges, earnings were 91 cents a share, below
analyst estimates for 98 cents.
Revenue slipped 4.4% to $8.02 billion. Excluding the impacts of
the Costco loss and the stronger dollar, the company said the top
line increased 6%.
Revenue at American Express has been in focus lately because it
has fallen short of internal growth targets. Analysts were looking
for $7.95 billion.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 19, 2017 16:59 ET (21:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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