Story updated with additional information and CEO and analyst comment.
NEW YORK (
reported increased quarterly earnings on revenue of $7.3 billion.
The credit card lender and payment processing network said it earned a fourth-quarter net income of $1.1 billion, an increase of $716 million over last year. Earnings per share were 88 cents, up from 60 cents a year ago. The results included the $113 million in restructuring and reengineering costs that were previously announced. Without the restructuring costs earnings would have been $94 cents per share, a company statement said.
Analysts estimated American Express would earn 95 cents per share on revenue of $7.33 billion, according to Thomson Reuters.
Many analysts, including Brian Foran, managing director of equity research at Nomura, thought that American Express' earnings were a bit disappointing.
"Most people actually thought it would be better than that because their spend volume for October and November was plus 15 percent year over year," said Foran. "Their credit costs have been better than expected throughout the quarter and so most of the investment clients that I spoke to thought Amex's earnings could be over a dollar. Our estimate was actually $1.06. So the 94 cents earnings
before restructuring costs was a negative surprise relative to expectations."
Consolidated total revenues net of interest expense were $7.3 billion, an increase of 13 percent from 2009. Consolidated expenses were up 17 percent at $5.6 billion.
U.S. Card Services net income for the quarter was up 70 percent from $701 million a year ago. Total revenues, net of interest expense, increased to $3.8 billion from $3.2 billion.
"With cardmember spending up 15 percent this period, we reached all-time records for the quarter and the full year," said American Express CEO Kenneth Chenault. "Credit indicators strengthened and the amount we needed to set aside for problem loans declined significantly from a year ago."
--Written by Maria Woehr in New York.
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