American Express posts 2Q profit slumps 48 per cent
24 Jul 2009
American Express Co, the largest credit card company by sales, has posted quarterly earnings that declined as expected by analysts. The company's earnings were squeezed by record credit losses, restructuring charges and repayment of government funds.
Net income shrank to $337 million or 9 cents per share, from $653 million or 56 cents per share, a year earlier.
The results accounted for a reduction of 18 cents per share resulting from the repurchase of preferred stock from the US Treasury Department and apart from that charge earnings per share were in line with analysts' projections of 27 cents.
Total revenue declined 18 per cent to $6.1 billion while consolidated expenses fell 16 per cent to $4.1 billion.
In the US card service business, net charge-offs which are a measure of bad loan write-offs rose to 10 per cent from 8.5 per cent from the previous quarter.
According to a statement by chief executive, Kennet Chenault, "Although it is still too early to point to any sure signs of an economic recovery, the number of cardmembers who are falling behind in their payments, the volume of bankruptcy filings and the level of loan write-offs were better than we had expected.''
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