clearn.png
Monday May 27th, 2019 3:23AM

American Express posts 4Q profit that tops forecasts

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — American Express swung to a fourth-quarter profit, the credit card company said Thursday, helped by a lower tax rate and more spending on the company's namesake credit cards.

The New York-based company earned $2.01 billion, or $2.32 a share, compared with a loss of $1.21 billion, or $1.42 a share, from the same period a year earlier. Like other financial companies, American Express' results a year ago were impacted by the passage of the new tax law, which required AmEx to make an accounting adjustment.

AmEx's net income for the latest quarter came in well above analysts' expectations, which were looking for the company to earn $1.80 a share, according to FactSet.

American Express continues to face a much more competitive industry, with big banks such as JPMorgan Chase and Citigroup creating their own premium credit card products to compete with AmEx.

In response AmEx has had to offer more rewards and perks with its cards. It spent $2.52 billion on rewards in the fourth quarter, up 11 percent from a year earlier.

But in the fact of more competition, AmEx has been able to encourage more customers to open accounts and spend more on its cards. AmEx card members spent $309 billion on their cards in the quarter, up 6 percent from a year earlier, charging an average fee of 2.36 percent on each transaction. It earns a fee every time its cards are used at a merchant. Total cards issued by AmEx were up 7 percent in the U.S., the company's largest market.

AmEx also has been encouraging its existing customers to revolve a balance as well, a change from the company's historic business model that focused on getting customers to pay their full balance each month. U.S. card member loans were $72 billion in the quarter, up from $64.5 billion in the same period a year ago.

But as the company has allowed more borrowed money on its cards, it has had to set aside more money to cover potential losses. Provisions for loan losses rose 14 percent to $954 million in the quarter.

Revenue in the quarter was $10.47 billion, less than the $10.58 billion that analysts had been looking for.

AmEx gave a forecast for its full-year 2019 earnings, saying it expects to earn $7.85 to $8.35 a share. Analysts are expecting $8.15 per share, according to FactSet.

The company's stock slipped $1.73, or 1.7 percent, to $97.76 in after-hours trading following the release of the earnings report.

  • Associated Categories: Associated Press (AP), AP Online Headlines - Washington, AP Online Congress News, AP Business, AP Business - Corporate News, AP Business - Industries, AP Business - Financial Services
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
American Express posts 4Q profit that tops forecasts
American Express is reporting that it swung to a fourth-quarter profit, helped by a lower tax rate and more spending on the company's namesake credit cards
4:59PM ( 13 minutes ago )
Brazil's Bolsonaro makes stumbling start as president
Brazilian President Jair Bolsonaro's first two weeks on the job have been filled with missteps and communication gaffes _ and little in the way of his promised sweeping changes
4:55PM ( 17 minutes ago )
Watchdog: Thousands more children may have been separated
Government investigators say thousands more migrant children may have been separated from their parents than previously reported
4:44PM ( 28 minutes ago )
Associated Press (AP)
Trump denies Pelosi aircraft for trip abroad
Trump denies Pelosi a military plane to visit troops abroad, raising stakes in what appears to be a game of constitutional one-upmanship
4:33PM ( 39 minutes ago )
The Latest: Trump calls for expanded missile defense program
President Donald Trump is vowing the U.S. will develop an unrivaled missile defense system in space to protect against advanced hypersonic and cruise missile threats from competitors and adversaries
4:06PM ( 1 hour ago )
Law firm tied to Manafort reaches $4.6 million settlement
A law firm tied to former Trump campaign chairman Paul Manafort's international consulting work has agreed to pay $4.6 million and register as a foreign agent
4:02PM ( 1 hour ago )
AP Online Headlines - Washington
The Latest: State Dept finds money, calls diplos to work
State Department finds money to pay its diplomats in Washington and abroad beginning Monday for the next two-week pay period, tells them to report to work
1:19PM ( 3 hours ago )
The Latest: House passes latest attempt to reopen govt
The Democratic-led House has again passed a bill to reopen the shuttered portions of the government, but like its predecessors, the measure appears doomed in the GOP-controlled Senate
1:06PM ( 4 hours ago )
The Latest: Trump says Democratic Party has been 'hijacked'
President Donald Trump says the Democratic Party has been "hijacked" by those opposed to his plan for a wall along the U.S-Mexico border as he seeks to turn up pressure on his political rivals over an ongoing partial government shutdown
12:09PM ( 5 hours ago )
AP Online Congress News
Slain mayor lies in state at Solidarity museum in Poland
The slain mayor of the city of Gdansk is laying in state at a museum devoted to Poland's pro-democracy Solidarity movement
4:25PM ( 47 minutes ago )
Opioid crisis brings unwanted attention to wealthy family
The nation's deadly opioid crisis is bringing new and unwanted attention to the wealthy Sackler family and complicating its philanthropic legacy
4:22PM ( 50 minutes ago )
AP source: Ottavino, Yankees agree to $27M, 3-year contract
AP source: Reliever Adam Ottavino, New York Yankees agree to $27 million, 3-year contract
3:52PM ( 1 hour ago )
AP Business
Sears confirms chairman's hedge fund wins bid in auction
Sears confirms that chairman's hedge fund wins bid in auction
1:14PM ( 3 hours ago )
Asian shares mixed on report of Huawei investigation
Asian shares mixed on report of US investigation against Huawei
1:50AM ( 15 hours ago )
Asian shares track Wall Street gains on robust US earnings
Asian shares climb on strong US earnings reports, but tensions with China limit gains
11:38PM ( 17 hours ago )
AP Business - Corporate News
US average mortgage rates steady; 30-year stays at 4.45 pct.
US average mortgage rates steady; 30-year average stays at 4.45 percent
12:03PM ( 5 hours ago )
Work on UK nuclear power plant halted over financing impasse
Work on a major new nuclear power station in Britain has been suspended after the contracted developer, Japan's Hitachi, said it had been unable to agree on financing
6:49AM ( 10 hours ago )
BOJ warns Japan faces new risks as population shrinks
Japan's central bank governor Kuroda warns of unforeseen risks in guiding economic policy as the country's population declines
2:48AM ( 14 hours ago )
AP Business - Industries
Fed survey finds businesses worried by political uncertainty
Fed survey cites rising concerns about stock market volatility and political uncertainty
2:39PM ( 1 day ago )
Goldman's 4Q profits beat estimates, despite trading worries
Goldman Sachs posts 4Q profit that beats forecasts, helped by better-than-expected bond and stock trading
9:13AM ( 1 day ago )
Goldman Sachs' 4Q profits beat forecasts, helped by trading
Goldman Sachs posts 4Q profit that beats forecasts, helped by better-than-expected bond and stock trading
8:19AM ( 1 day ago )
AP Business - Financial Services
Brazil's Bolsonaro makes stumbling start as president
Brazilian President Jair Bolsonaro's first two weeks on the job have been filled with missteps and communication gaffes _ and little in the way of his promised sweeping changes
4:55PM ( 17 minutes ago )
Watchdog: Thousands more children may have been separated
Government investigators say thousands more migrant children may have been separated from their parents than previously reported
4:44PM ( 28 minutes ago )
Talks resume in effort to end strike by LA teachers
A new round of contract negotiations began between Los Angeles school district officials and a teachers union as thousands of educators picketed in the rain
4:44PM ( 29 minutes ago )
The Latest: Judge: Laquan McDonald still a threat on ground
The judge who cleared three Chicago officers of trying to cover up the 2014 fatal police shooting of Laquan McDonald appears to have accepted an argument that jurors who convicted the officer who fired the shots didn't
4:42PM ( 30 minutes ago )
US presses ahead with border wall in court despite shutdown
A government attorney in South Texas has said in court that during the ongoing partial government shutdown, he's been only allowed to work on cases related to a proposed border wall
4:38PM ( 34 minutes ago )