American Express posts higher profit

updated 3:02 p.m. ET Jan. 26, 2004

American Express, the consumer finance and travel company, reported a 12 percent rise in fourth quarter profit.

The New-York based company said Monday that net income totaled $763 million, or 59 cents a share, in the October-December period, up from $683 million, or 52 cents a share, a year earlier.

The results _ which included a $20 million charge for an accounting change _ were on target with the 59 cents profit expected by analysts surveyed by Thomson First Call.

In midday trading, American Express shares were up 24 cents at $50.20 on the New York Stock Exchange.

Chairman and chief executive officer Kenneth I. Chenault said in a statement accompanying the report that business gained momentum in the final months of 2003 "and produced results that exceeded our earlier forecast."

He added that the company's performance puts American Express "in an excellent position to capitalize on an improving economy as we enter 2004."

The company said that strong revenue growth "reflects a strong rise in card member spending, lending balances and cards-in-force" as well as higher asset levels at American Express Financial Advisors.

All the major divisions reported fourth-quarter gains in profits.

Net income for travel-related services rose 10 percent from a year earlier to $606 million in the fourth quarter. Earnings at American Express Financial Advisors were up 19 percent to $182 million, reflecting improved market conditions. Earnings at the American Express Bank rose 22 percent to $29 million.

Revenue for the quarter was $7.07 billion, up 14 percent from $6.2 billion in the year-earlier quarter.

Profits for the year were $2.99 billion, or $2.30 a share, on revenue of $25.87 billion. That compared with earnings of $2.67 billion, or $2.01 a share, on revenue of $23.81 billion in 2002.

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