American Express Profit Down 21% Y2Y

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American Express Thursday said its profits had fallen 22 per cent in the third quarter to $632 million dollars compared to the same period last year...a better result than analysts had expected...

NEW YORK, October 22, 2009 -- American Express Company (NYSE: AXP) today reported third-quarter income from continuing operations of $642 million, down 25 percent from $861 million a year ago. Diluted earnings per share from continuing operations were $0.54, down 27 percent from $0.74 a year ago.



The third quarter results included a $180 million ($113 million after-tax) non-recurring benefit associated with the company’s accounting for a net investment in consolidated foreign subsidiaries (discussed in more detail later). Excluding that benefit, adjusted diluted earnings per share from continuing operations were $0.44.



Net income totaled $640 million for the quarter, down 21 percent from $815 million a year ago. Diluted per-share net income of $0.53 was down 24 percent from $0.70 a year ago. Excluding the non-recurring benefit mentioned above, adjusted diluted per-share net income was $0.43.(2)

• Consolidated revenues net of interest expense declined 16 percent to $6.0 billion, down from $7.2 billion a year ago.


• Consolidated provisions for losses totaled $1.2 billion, down 13 percent from $1.4 billion a year ago.


• Consolidated expenses totaled $3.9 billion, down 17 percent from $4.7 billion a year ago, reflecting in part the results of the company’s reengineering initiatives.

At the end of the quarter, the company’s tier-one risk based capital ratio was 9.7 percent. Its tier-one common risk based ratio was 9.7 percent, which compared favorably to the regulatory benchmark(3) of 4 percent.



The company's return on average equity (ROE) was 11.7 percent, down from 27.8 percent a year ago. Return on average common equity (ROCE), was 10.4 percent, down from 27.6 percent a year ago.



“Our results showed further progress in navigating through the most difficult economic environment in decades,” said Kenneth I. Chenault, chairman and chief executive officer.



Supporting Materials

•   Conference Call (audio)


•   Financial Tables (PDF)


•   Earnings Supplement (PDF)


•   Earnings Slides (PDF)
  
  

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