American Express Sees 3Q Income Drop 60% to $289MAmerican Express Co. said that its net income for the third quarter fell 60 percent to $298 million from $737 million a year ago.
Diluted net income per share fell 59 percent in the quarter, to 22 cents per share from 54 cents per share in 2000.
The company blamed the shortfall on its restructuring and the effect of the Sept. 11 terrorist attacks.
Net revenue for the quarter that ended Sept. 30 fell about 1 percent to $5.5 billion from $5.6 billion a year earlier.
"Results for the third quarter were negatively affected by two significant items," American Express said, "a previously announced restructuring charge of $352 million pre-tax and the impacts of the Sept. 11 terrorist attacks."
The company said that the Sept. 11 attacks resulted in a one-time pre-tax loss of about $98 million, which includes provisions related to credit exposures to travel industry services, insurance claims and waived finance charges and late fees.
Its third-quarter restructuring charge included severance costs for the elimination of 6,100 positions. American Express said this should save $325 million in expenses in 2002, in addition to the nearly $700 million in savings realized in the first half of 2001.
The company said net income for its Travel Related Services business fell 51 percent in the third quarter to $248 million, from $507 million a year ago. Included in that figure were one-time costs and waived fees of $87 million relating to Sept. 11, the company said.
Its American Express Financial Advisors business reported net income of $145 million, down 46 percent from the $269 million posted in the same quarter a year ago. Included in that figure is $11 million relating to the events of Sept. 11, the company said.
American Express Bank reported net income of $43 million, up substantially from $7 million in the same quarter in 2000. The company said AEB was helped by a strong performance from its Personal Financial Services and Private Banking divisions.