NEW YORK (
(AXP - Get Report)
reported better than expected fourth quarter earnings late Thursday boosted by substantially lower credit costs.
American Express said net income tripled from the year-earlier quarter to $716 million. Net income attributable to shareholders came in at 60 cents a share, beating Wall Street estimates of 57 cents a share.
Income from continuing operations totaled $710 million, or 59 cents a share. The year-earlier quarter saw income from continuing operations of $306 million, or 26 cents a share.
Income from last year's fourth quarter included two significant items -- a $421 million ($273 million after-tax) of re-engineering costs, primarily related to severance and other costs associated with staff reductions, and a $106 million ($66 million after-tax) increase in the company's Membership Rewards reserve, in connection with the company's extension of its partnership agreement with Delta Air Lines, American Express said.
Revenue, net of interest expense, totaled $6.49 billion, down slightly from the year-earlier quarter's revenue figure.
American Express said it recorded a $748 million provision for credit losses, down 47% from the year-earlier period. The decline reflected continued improvement in credit quality during the latter part of 2009, American Express said.
The company said loans on a managed basis in its U.S. card services business, which includes securitized and on-balance sheet loans, had a net loan write-off rate of 7.5%, down from 8.9% in the third quarter, but up from 6.7% a year ago. Net write-offs on an owned basis were 8.0% in the quarter, consistent with earlier expectations. That number was down from 9.8% in the third quarter, but up from 7.0% in the year-earlier period.