American Express profits lower in Q1
The company's earnings per share from continuing operations came in at 32 cents, down 64 percent from 89 cents per share a year ago. Total revenues dropped 18 percent, from $7.2 billion last year to $5.9 billion in the first quarter, reflecting increasing bad loans and reduced credit spending due to the slumping economy.
"At a time when some parts of the card industry were incurring substantial losses, we remained solidly profitable thanks, in part, to our flexibility in adapting to a very difficult economic environment and the diversity of our business model," said Kenneth Chenault, Amex chairman and CEO.
The company's U.S. Card Services unit reported a first quarter loss of $25 million the company said, due to reduced card-member spending and lower securitization income. Those losses were offset by gains in the company's International Card services unit, which reported profits of $39 million, lower than the $133 million a year ago, and its Global Commercial Services unit, which saw a profit of $86 million in the first quarter, down from the $151 million recorded during the same period last year. The Global Network & Merchant Services unit recorded the bulk of the profits, taking in $237 million, up six percent over the $223 million from a year before. Corporate also saw a profit of $106 million, up from $14 million a year ago largely due to results from re-engineering initiatives.