Banking, finance, and taxes
American Express Internals Deteriorate Rapidly (AXP)
Published:
Last Updated:
American Express (NYSE: AXP) just posted $0.56 EPS on $7.484 Billion in revenues, although we would note that there are items in these results from continuing operations.
First Call had estimates of $0.83 EPS on $7.6 Billion in revenues.
It does not expect to meet or exceed its its financial targets until the economy improves.
The company said it will trim overall costs and staffing levels aswell.
We would also note that results included a $600 million grossaddition to U.S. lending credit reserves over a deterioration of creditindicators beyond expectation, and a $136 million gross charge to thefair market value of retained interest in securitized cardmember loans,and included a tax benefit of $101 million primarily related toresolution of certain prior years’ tax items.
Shares closed down 3% at $40.90 in normal trading, but shares are down 8% at $37.60 in the initial reaction after the close.
Unfortunately, this means that credit quality even in the high-end of the credit spectrum is going to get worse before it gets better.
Jon C. Ogg
July 21, 2008
Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.