Credit card issuer American Express Co. (AXP: Quote) said Thursday after the markets closed that its fourth quarter profit fell 47% from last year, hurt by costs including a restructuring charge tied mainly to a planned elimination of 5,400 jobs.
The New York-based company said its net income for the fourth quarter was $637 million or $0.56 per share, compared to $1.2 billion, or $1.01 per share for the year-ago quarter.
The latest quarter results include $594 million in after-tax costs including a $287 million after-tax restructuring charge consisting largely of severance payments related to the the job cuts.
Excluding items, adjusted net income for the latest quarter was $1.2 billion or $1.09 per share, which topped the $1.06 per share consensus estimate of 25 analysts polled by Thomson Reuters.
The company said the job cuts will take place across seniority levels, businesses and staff groups, with the largest cuts occurring in the travel businesses that operate in a fast changing industry due the digital revolution. The cuts, which will be spread proportionally between the domestic and international markets, will mainly involve positions that do not directly generate revenue.
American Express noted that the job cuts will be partly offset by jobs it expects to add during the year. The company's total headcount by year end 2013 is expected to drop by 4% to 6% from the current 63,500.
"Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth," said Kenneth Chenault, chairman and chief executive officer of American Express.
American Express said its fourth quarter consolidated total revenues net of interest expense rose 5% to $8.1 billion from $7.7 billion a year ago. Twenty-one analysts had a consensus revenue estimate of $8.12 billion for the fourth quarter.
Cardmember spending grew 8% from a year earlier, despite a brief dip in late October/early November reflecting the impact of Hurricane Sandy consumers and businesses in the northeastern United States, the company said.
American Express said it will release full fourth quarter and full year 2012 results as scheduled on January 17.
American Express shares are currently losing 1.05% in after hours trading after closing the day's regular trading session at $60.79, up 53 cents. The stock trades in a 52-week range of $48.82 to $61.42.
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by RTT Staff Writer
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