Finance Watch -- WSJ
January 20 2017 - 3:03AM
Dow Jones News
AMERICAN EXPRESS
Profit, Revenue Fall
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.
AmEx 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 analysts' estimates for 98 cents. Revenue slipped 4.4% to
$8.02 billion.
Revenue at AmEx has been in focus lately because it has fallen
short of internal growth targets. Analysts were looking for $7.95
billion.
AmEx has suffered from issues including the loss of its 16-year
exclusive relationship with warehouse-club retailer Costco
Wholesale Corp., heavy competition and 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.
--Anne Steele
KEYCORP
Merger Has Impact
On Revenue, Profit
Regional lender KeyCorp said revenue climbed in the fourth
quarter, thanks in part to its recent acquisition of First Niagara
Financial Group Inc., as a key measure of lending profitability
expanded.
The Cleveland-based bank reported net income of $229 million, or
19 cents a share, compared with $226 million, or 26 cents a share,
a year earlier. Excluding merger-related costs, KeyCorp earned 31
cents a share.
Revenue rose 43% to $1.57 billion. Analysts polled by Thomson
Reuters expected earnings of 29 cents a share on $1.45 billion in
revenue. Shares fell 1.6% to $17.84.
KeyCorp, which last year acquired First Niagara for about $4.1
billion, said net interest income rose 55% to $948 million.
Noninterest income rose 27% to $618 million, helped by
investment banking and debt placement fees, as well as service
charges on deposit accounts.
Like many other lenders, KeyCorp has moved to cut costs and has
closed some branches. Deal-related costs added up to $207 million
in the quarter. Excluding merger-related charges, noninterest
expenses rose 39% from a year ago, reflecting the impact of adding
in First Niagara.
The net interest margin -- a gauge of lending profitability was
3.09% in the fourth quarter, up from 2.84% a year ago.
--Joshua Johnson
M&T BANK
Mortgage Activity
Helps Lift Earnings
M&T Bank Corp. said its fourth-quarter earnings rose, helped
by higher mortgage revenues and loans.
The Buffalo, N.Y., bank said its commercial-loan portfolio grew
by 15% over the quarter.
Profit totaled $330.6 million, or $1.98 a share, up 22% from
$271 million, or $1.65 a share, a year earlier. Revenue -- a
combination of net interest and noninterest income -- grew by 6.8%
to $1.35 billion. Analysts polled by Thomson Reuters had forecast
earnings of $2.04 a share on $1.33 billion in revenue. Shares rose
0.5% to $155.35.
--Imani Moise
(END) Dow Jones Newswires
January 20, 2017 02:48 ET (07:48 GMT)
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