American Express (AXP): The Faithful Are Rewarded
October 20, 2008 by Douglas A. McIntyre
Expectations for American Express’s (AXP) earnings were less than modest. Analysts polled by Thomson Reuters, on average, forecast earnings of $.59 for the quarter. Friedman, Billings, Ramsey reported that American Express reported default rates of 6.14 percent in September, the highest rate since November 2005 when bankruptcy laws changed, according to the AP.
Estimates are for revenue to come in at $7.31 billion.
Like much of the rest of the market, Amex rallied over 4% to $24.35. It still trades near a 52-week low.
The company’s diluted earnings per share from continuing operations were $.74, down 21 percent from $.94 a year ago. Income from continuing operations of $861 million, down 23 percent from $1.1 billion a year ago, and revenue rose 3% to $7.164 billion.
International card services were hit especially hard, with net income off 52% to $67 million. Net income was flat in the global commercial services segment at $134 million.
After hours trading was indicating up to $26, so those brave souls who bought today may be rewarded.
Douglas A. McIntyre
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