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Contributors: Douglas McIntyre Jon C. Ogg

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Monday, July 24, 2006

American Express Up, But No Help to the DJIA

American Express (AXP) just reported earnings slightly ahead of expectations. It posted $0.78 EPS and Revenues of $6.9 Billion versus $0.75 & $6.66 Billion estimates. Here is a breakdown:

Diluted earnings per share from continuing operations were $0.78, up 13 percent from $0.69 a year ago. Including results for businesses that the Company has spun off or sold during the past year, net income for the second quarter totaled $945 million, down 7 percent from $1.0 billion a year ago. Net income per share on a diluted basis was $0.76, down 6 percent from $0.81.

So while diluted earnings from continued operations were up, the net net number was lower. Shares have reszponded positively so far, and American Express is a DJIA component. AXP shares are up 1.7% to $51.52, but they were already up about 0.9% prior to the earnings report. Before AXP earnings shares of Mastercard (MA) were about flat on the day, and that looks roughly the same.

Virtually none of the other credit card companies are independent now, so it is hard to make any industry comparisons based on AXP numbers. This news came mid-day as well, so it has not really contributed anything to todays 125 point gain in the DJIA.

Jon C. Ogg
July 24, 2006

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