AMERICAN EXPRESS

Profit, Revenue Fall

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.

AmEx 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 analysts' estimates for 98 cents. Revenue slipped 4.4% to $8.02 billion.

Revenue at AmEx has been in focus lately because it has fallen short of internal growth targets. Analysts were looking for $7.95 billion.

AmEx has suffered from issues including the loss of its 16-year exclusive relationship with warehouse-club retailer Costco Wholesale Corp., heavy competition and 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.

--Anne Steele

KEYCORP

Merger Has Impact

On Revenue, Profit

Regional lender KeyCorp said revenue climbed in the fourth quarter, thanks in part to its recent acquisition of First Niagara Financial Group Inc., as a key measure of lending profitability expanded.

The Cleveland-based bank reported net income of $229 million, or 19 cents a share, compared with $226 million, or 26 cents a share, a year earlier. Excluding merger-related costs, KeyCorp earned 31 cents a share.

Revenue rose 43% to $1.57 billion. Analysts polled by Thomson Reuters expected earnings of 29 cents a share on $1.45 billion in revenue. Shares fell 1.6% to $17.84.

KeyCorp, which last year acquired First Niagara for about $4.1 billion, said net interest income rose 55% to $948 million.

Noninterest income rose 27% to $618 million, helped by investment banking and debt placement fees, as well as service charges on deposit accounts.

Like many other lenders, KeyCorp has moved to cut costs and has closed some branches. Deal-related costs added up to $207 million in the quarter. Excluding merger-related charges, noninterest expenses rose 39% from a year ago, reflecting the impact of adding in First Niagara.

The net interest margin -- a gauge of lending profitability was 3.09% in the fourth quarter, up from 2.84% a year ago.

--Joshua Johnson

M&T BANK

Mortgage Activity

Helps Lift Earnings

M&T Bank Corp. said its fourth-quarter earnings rose, helped by higher mortgage revenues and loans.

The Buffalo, N.Y., bank said its commercial-loan portfolio grew by 15% over the quarter.

Profit totaled $330.6 million, or $1.98 a share, up 22% from $271 million, or $1.65 a share, a year earlier. Revenue -- a combination of net interest and noninterest income -- grew by 6.8% to $1.35 billion. Analysts polled by Thomson Reuters had forecast earnings of $2.04 a share on $1.33 billion in revenue. Shares rose 0.5% to $155.35.

--Imani Moise

 

(END) Dow Jones Newswires

January 20, 2017 02:48 ET (07:48 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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