American Express Earnings Loom on Street

Updated from 7/20/01

Don't worry. You'll probably be safe leaving home today without this stock in your portfolio.

American Express (AXP Quote) reports its second-quarter earnings Monday afternoon, and it's not going to be a pretty picture. The credit card giant warned Wednesday that it would take an $826 million charge against earnings to cover the cost of junk-bond losses. On top of that, investors likely will be presented with slower-than-predicted revenue growth and murky earnings guidance.

Monday will mark the third time in as many quarters that the company will take a charge for junk bonds -- known in polite society as high-yield investments -- in its American Express Financial Advisors, or AEFA, unit. Never mind the company's assurances in April that there would not be another significant writedown in the AEFA portfolio. ...