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American Express Third Quarter EPS Up 6% To $1.09; Revenues Rise, Expenses Decline

Total expenses decreased 3 percent primarily reflecting lower operating expenses. Adjusted for foreign currency translations, expenses were unchanged from a year ago. 3

The effective tax rate was 21 percent compared to (17) percent in the year ago period, which reflected the realization of certain foreign tax credits last year.

Global Commercial Services reported third-quarter net income of $183 million, down 7 percent from $197 million a year ago.

Total revenues net of interest expense increased 2 percent to $1.2 billion, reflecting higher cardmember spending, partially offset by lower travel commissions and fees. Adjusted for foreign currency translations, revenues rose 5 percent from a year ago. 3

Provisions for losses totaled $32 million compared with a credit of $17 million a year ago, which included reserve releases last year.

Total expenses decreased 3 percent, reflecting lower operating expenses as well as lower costs for marketing, promotion, rewards and cardmember services expenses. Adjusted for foreign currency translations, expenses were down 1 percent compared to a year ago. 3

The effective tax rate was 33 percent compared to 27 percent in the year ago period. The year ago tax rate reflected the realization of certain foreign tax credits.

Global Network & Merchant Services reported third-quarter net income of $360 million, up 8 percent from $332 million a year ago.

Total revenues net of interest expense increased 5 percent to $1.3 billion, reflecting higher merchant-related revenues driven by an increase in global cardmember spending. Adjusted for foreign currency translations, revenues rose 7 percent from the year ago quarter. 3

Total expenses increased 2 percent. An increase in operating expenses was partially offset by lower marketing, promotion, rewards and cardmember services expenses. Adjusted for foreign currency translations, expenses rose 4 percent from a year ago. 3

The effective tax rate was 36 percent compared to 35 percent in the year ago period.

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