American Express earnings reflect sale of financial planning unit in fourth quarter |

American Express earnings reflect sale of financial planning unit in fourth quarter

NEW YORK – American Express Co., which specializes in travel services and credit cards, said Monday its net income slid in the fourth quarter from year-earlier results that included profits from a financial planning unit it no longer owns.Excluding the unit, which now operates independently as Ameriprise Financial Inc., results in the October-December period were up 12.2 percent from a year earlier, boosted in part by higher spending on the company’s cards.In afternoon trading, the company’s shares advanced 32 cents to $51.72 on the New York Stock Exchange.New York-based American Express said net income totaled $745 million, or 59 cents a share, in the fourth quarter, down about 17 percent from the year-earlier profits of $896 million, or 71 cents a share.Excluding the spin-off costs for Ameriprise and related businesses, fourth-quarter earnings were $751 million, or 60 cents a share, up from $669 million, or 53 cents a share, a year earlier.Revenues were $6.44 billion in the fourth quarter, a 9 percent increase over the $5.9 billion reported a year earlier.Analysts surveyed by Thomson Financial had projected earnings of 59 cents a share of income of $6.84 billion.Like many financial institutions, American Express took a hit because of the spike in bankruptcy filings ahead of the Oct. 17 change in the nation’s bankruptcy law. The company increased its provision for losses in the fourth quarter by $192 million, or 32 percent. But this was more than offset by increased spending by card users, the company said.Kenneth I. Chenault, chairman and chief executive, said in a statement accompanying the report that “higher spending by affluent consumers, small businesses and corporate card members more than offset the impact of an industrywide spike in bankruptcy filings.”He said that aggressive marketing and acquisitions helped add 2 million new cards in the fourth quarter and that spending grew 15 percent.Chenault noted the card company’s 2005 deals with major U.S. financial institutions, including Citibank in New York and Bank of America in Charlotte, N.C., and added: “All in all, American Express is entering 2006 in excellent competitive position.”The company reported higher net income in the fourth quarter in all three divisions – U.S. card services, up 13 percent at $411 million; international card and global commercial services, up 30 percent at $241 million; and global network and merchant services, up 19 percent at $159 million.For the full year, net income totaled $3.73 billion, or $2.97 a share, up 8.4 percent from $3.45 billion, or $2.68 a share, in 2004. Profits from continuing operations were $3.22 billion, or $2.56 per share, for all of 2005, up from $2.69 billion, or $2.09 a share, in 2004.Revenue for the year was $24.27 billion, up 10.5 percent from $21.96 billion in 2004.—On the

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