American Express Slashes Workforce, Takes Charge
NEW YORK (TheStreet) -- American Express (AXP) shocked investors late on Thursday by announcing the elimination of 5,400 jobs and fourth-quarter restructuring charges totaling $742 million.
The payment processor and credit card lender also announced fourth-quarter charges totaling $153 million, for "cardmember reimbursements for various types of transactions dating back several years. This amount deals with fees, interest and bonus rewards as well as an incremental expense related to the consent orders entered into with regulators last October."
The charges totaled $594 million after taxes and American Express said that its fourth-quarter net income was $637 million, or 56 cents a share, declining from $1.250 billion, or $1.09 a share, in the third quarter, and $1.192 billion, or $1.01 a share, in the fourth quarter of 2012.
Analysts polled by Thomson Reuters on average estimated that the company would earn $1.06 a share in the fourth quarter. Excluding the special items, American Express said that its "fourth quarter adjusted net income was $1.2 billion, or $1.09 per share."
The company reported total fourth-quarter revenue of $8.1 billion, meeting the consensus estimate, however, if the card-member reimbursements were backed-out, fourth-quarter revenue would have totaled $8.234 billion, beating the estimate and increasing from $7.778 billion in the fourth quarter of 2011. Shares of American Express were up 1% in aftermarket trading, to $61.45. During a conference call Thursday afternoon, America Express CEO Kenneth Chenault said that the preannouncement of the layoffs was done for "greater transparency," and that the company would "save a more detailed discussion for next week." American Express will announce its full fourth-quarter results on Jan. 17. Interested in more on American Express? See TheStreet Ratings' report card for this stock.-- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn
Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Dividend Stock Advisor
TRY IT FREENew! $49.95/yr
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Real Money
TRY IT FREE24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
Product Features:
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
