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Contributors: Douglas McIntyre Jon C. Ogg

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Monday, October 23, 2006

American Express EPS Beats, But Revenues and Items Bring Questions

American Express (AXP) reported $0.76 EPS and revenues of $6.759 Billion, and the street was looking for $0.76 EPS and $6.82 Billion in revenues. So a beat on earnings and revenues barely missed the mark.

This is $956 million in net income, up 11% from the $865 million posted in Q3 2005. It posted a return on equity of 33.6%. The quarter did include a $33 million ($24 million after-tax) gain related to the sale of the Company's card operations in Malaysia and Indonesia.

These numbers are a bit skewed on a year-over-year basis because of discontinued Ameriprise results and other units.

Before the earnings report AXP shares had climbed back into positive territory after being down 0.45% earlier in the trading day. Shares have now dropped back toward the lows of the day at $57.80, down 0.4% on the day. It is also very frequent that street ends up treating shares differently after the initial reaction. We'll have to see how the company outlines the overall structure in its conference call later.

Jon C. Ogg
October 23, 2006

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