Updated from 1:55 p.m. EST
reported fourth quarter profits that largely matched Wall Street's diminished expectations Monday.
In the quarter, the New York financial services firm earned $745 million, or 59 cents a share, compared to $896 million, or 71 cents a share, in the year ago period.
Much of the 16% decline in net earnings was due to last year's spinoff of American Express' financial planning operation, now called
On an operating basis, which excluded the financial planning division, American Express earned $751 million, or 60 cents in a quarter, compared to $669 million, or 53 cents, a year ago.
Analysts, as surveyed by Thomson Financial, had expected operating earnings of 59 cents a share.
warned in November that the flood of personal insolvencies ahead of a new bankruptcy law would hurt the quarter's performance. In the quarter, the company's provision for credit losses, largely because of the new law, rose 34% to $813 million.
Revenue at American Express came in beneath expectations, rising 9% to $6.44 billion. Analysts were looking for revenues of $6.83 billion.
Expenses rose 10% to $5.5 billion. Much of the increase was due to an 11% rise in spending on marketing and promotions, which totaled $1.58 billion.
In midday trading, shares of American Express were up 48 cents, or 1%, to $51.88. The stock had been trading a bit higher in advance of the earning announcement, which was release shortly after 1 p.m.
In the quarter, discount revenue, which represents the money American Express makes from its main card business, rose 12.7% to $3.17 billion. Finance charge revenue 25% to $703 million
Return on equity, a measurement of a firm's ability to generate earnings, in the quarter was 25%, up from 22% a year ago.