American Express Company reports fourth-quarter income from continuing operations of $238 million, 72% down from $858 million a year ago.
The company’s return on average equity (ROE) was 21.7%, down from 37.3% a year ago. Diluted earnings per share from continuing operations were $0.21, down 71% from $0.73 a year ago. Net income totaled $172 million for the quarter, down 79% from a year ago. On a per-share basis, net income was $0.15, down 79% from $0.71 a year ago.
Consolidated total revenues net of interest expense declined 11% to $6.5 billion, down from $7.3 billion a year ago. Consolidated provisions totaled $1.4 billion compared to $1.5 billion in the year-ago period, which included a significant credit related charge.
Consolidated expenses totaled $4.9 billion, up 5% from $4.7 billion a year ago. Both periods included significant items, which are outlined below.
“Our fourth quarter results reflect an operating environment that was among the harshest we have seen in decades,” says Kenneth I. Chenault, chairman and chief executive officer. “Nevertheless, we met our near term goals – staying liquid, staying profitable, and investing selectively to strengthen our competitive position over the longer term.”
“We remained profitable in the quarter and generated $2.8 billion in earnings for the full year 2008. We exceeded all of our funding requirements, in part by raising $6.2 billion through a new retail certificate of deposit program.
“While our business volumes compared favorably with other major competitors, overall cardmember spending declined 10% year-over-year, or 5% adjusting for foreign exchange rates,” continues Kenneth I. Chenault. “As anticipated, loan delinquencies and write-offs rose. These trends, together with the restructuring charge, had a significant impact on our bottom line.”
“In January, we further bolstered our capital position with a $3.4 billion investment from the U.S. Treasury Capital Purchase Program. These additional funds will enhance our ability to continue extending loans to credit-worthy consumers and small business owners.”
“We authorized more than $73 billion of U.S. charge card spending during the quarter, and we are providing U.S. consumer and small business cardmembers with open credit lines that are on par with year-ago levels, despite the difficult conditions in the marketplace. Our aim is to accommodate the spending needs of our cardmembers, while helping to ensure that they do not incur inappropriate debt levels.”
L.D.