The FINANCIAL — American Express Company reported fourth-quarter net income of $1.3 billion, up from $637 million a year ago.
The FINANCIAL — American Express Company reported fourth-quarter net income of $1.3 billion, up from $637 million a year ago. Diluted earnings per share rose to $1.21, from $0.56 a year ago. Excluding expenses associated with the merchant litigation settlement agreement announced in late December, fourth-quarter adjusted net income was $1.3 billion, or $1.25 per share, according to American Express Company.
The year-ago quarter included three significant items: a restructuring charge; an expense associated with higher estimated redemptions of Membership Rewards points; and the impact of Card Member reimbursements.
Consolidated total revenues net of interest expense rose to $8.5 billion in the fourth quarter, from $8.1 billion a year ago, representing a 5 percent increase (6 percent when adjusted for foreign currency translations). The increase reflected higher Card Member spending and higher net interest income, according to American Express Company.
Consolidated provisions for losses totaled $528 million, down 17 percent from $638 million a year ago. This decrease reflected lower net write offs and a modest reserve release this quarter, compared with a modest increase in reserves last year. Credit indicators improved further from historically strong levels reported in prior quarters.
Consolidated expenses totaled $6.0 billion, down 8 percent from $6.6 billion a year ago. The decrease reflected the three year-ago items mentioned above. Adjusted for foreign currency translations, consolidated total expenses were down 7 percent from a year ago, according to American Express Company.
The effective tax rate for the quarter was 34 percent, up from 31 percent from a year ago.
The company's return on average equity (ROE) was 27.8 percent, up from 23.1 percent a year ago, according to American Express Company.
For the full year, the company reported net income of $5.4 billion, up 20 percent from $4.5 billion a year ago. Diluted earnings per share rose to $4.88, up 25 percent from $3.89 a year ago.
Revenues net of interest expense for the full year increased 4 percent (5 percent FX adjusted) to $33.0 billion from $31.6 billion a year ago. Consolidated expenses totaled $23.0 billion, down 1 percent from a year ago. Adjusted for foreign currency translations, expenses were unchanged from a year ago, according to American Express Company.
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