American Express Posts Lower Earnings, Revenue

By Anne Steele

American Express Co. posted lower top- and bottom-line results in the final quarter of the year, but the credit card company said it has made progress in turning around its business.

Shares edged down 0.3% after hours to $76.50.

American Express has suffered from issues ranging from the loss of its 16-year exclusive relationship with warehouse-club retailer Costco Wholesale Corp., to heavy competition, to declines in corporate travel budgets.

"At the start of 2016 we said we would move with a strong sense of urgency to change the trajectory of our business," said Chief Executive Kenneth Chenault. "The results we're reporting today reflect substantial progress on that commitment."

Mr. Chenault said the company is ahead of plans to reset its cost base and improve operating efficiency. American Express last year said it would cut $1 billion in costs. On Thursday it said its fourth-quarter expenses were 2% lower.

Mr. Chenault, who acknowledged "we continue to operate in a very challenging environment," said card member spending grew 7% during the quarter, excluding the impact of Costco in the year earlier-period and the effect of the stronger U.S. dollar.

The company attributed the gains to continued strength in international markets, accelerated growth among small and midsize companies and strong long-term relationships with higher spending consumers.

For 2017, the company forecast earnings of $5.60 to $5.80 a share, bracketing analysts' estimates for $5.75 a share, according to Thomson Reuters.

In all for the fourth quarter, American Express reported a profit of $825 million, or 88 cents a share, down from $899 million, or 89 cents a share, a year earlier. Excluding restructuring charges, earnings were 91 cents a share, below analyst estimates for 98 cents.

Revenue slipped 4.4% to $8.02 billion. Excluding the impacts of the Costco loss and the stronger dollar, the company said the top line increased 6%.

Revenue at American Express has been in focus lately because it has fallen short of internal growth targets. Analysts were looking for $7.95 billion.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

January 19, 2017 16:59 ET (21:59 GMT)

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