NEW YORK – American Express Co. on Monday reported stronger holiday shopping and a reduction in bankruptcy write-offs helped lift fourth-quarter profit by 24 percent, but revenue fell below Wall Street projections.
The New York-based financial and travel services company reported a profit of $922 million, or 75 cents per share, for the September-December period, compared with $745 million, or 59 cents per share, a year earlier.
The year-ago period included results before the sale of its banking business in Brazil. Excluding that business and other discontinued operations, the company reported fourth-quarter profit rose to $925 million, or 76 cents per share, from $751 million, or 60 cents per share, a year earlier.
This matched Wall Street projections for earnings of 76 cents per share, according to analysts polled by Thomson Financial.
The No.4 U.S. credit-card issuer said stronger spending by cardholders during the holiday season pushed revenue up 13 percent to $7.21 billion from $6.38 billion a year earlier. Analysts expected revenue of $7.33 billion during the period.
"Our strong revenue and earnings this quarter were driven by record cardmember spending during the holiday shopping season and continued growth in our loan portfolio," said Chairman and Chief Executive Kenneth I. Chenault in a statement.
The results included $64 million in costs related primarily to restructuring initiatives throughout the company, which was about even with the year-ago period. The quarter also included a $68 million pretax gain related to the rebalancing of its investment portfolio.
American Express has been among the better performing companies in the credit-card industry, and expanded last year by striking up deals to issue its cards with major U.S. banks.
The company said it was also helped by lower default rates from its customers as new U.S. bankruptcy laws make it harder for consumers to avoid paying debt.
Profit in 2006 slipped 1 percent to $3.71 billion, or $2.99 per share, from $3.73 billion, or $2.97, in the previous year. However, this decline was because AmEx spun off financial services unit Ameriprise Financial Inc. in 2005.
Stripping out Ameriprise and other discontinued operations, the company reported profit rose 16 percent to $3.73 billion, or $3.01 per share, from $3.22 billion, or $2.56 per share, in 2005.
American Express shares fell 17 cents to $57.94 in afternoon trading on the . The stock rose 18 percent last year, and posted a 52-week high of $62.50. Ameriprise, which reports results on Thursday, fell 64 cents to $56.96.
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