AmEx Tops Wall Street Profit View

NEW YORK (TheStreet) -- American Express(AXP) Thursday reported second-quarter earnings of $1 billion, or 84 cents a share, up from a year-ago profit of $337 million, or 9 cents a share, and ahead of Wall Street expectations.

The year-ago earnings were reduced by 18 cents a share because of the credit card issuer's repurchase of preferred stock related to the Troubled Asset Relief Program from the U.S. Treasury. Last year's quarter also reflected the impact of $118 million of net re-engineering charges and a $135 million after-tax gain on the sale of a portion of the company's equity holding in Industrial and Commercial Bank of China.

American Express Stock Rating Report (AXP) Rating and Financial Analysis

Net of interest expense, revenue rose 13% in the latest three months to $6.86 billion from $6.09 billion in the same period a year earlier.

The average estimate of analysts polled by Thomson Reuters was for a profit of 78 cents a share in the June period on revenue of $6.84 billion.

"While the economic environment remains uneven, our net income and billed business are back at, or near, their pre-recession levels," said Kenneth Chenault, the company's chairman and CEO, in a press release. "Some of the year-over-year improvement represents an initial return on our investments in the business, but the large percentage increases also reflect comparisons with last year's recessionary levels."

AmEx said its total provision for losses was $652 million in the latest quarter, down from $1.6 billion in the year-ago period as it saw "continued improvement in credit quality for the charge and credit card portfolios."

Chenault expressed caution about the economy and the impact of changing financial industry regulations later in the press release, and noted that comparisons "will be more difficult in the second half."

The stock closed Thursday's session at $43.19, up 5% for the day, but was trading down 1.6% in the latest after-hours action.

--Written by Michael Baron in New York.

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