American Express Earnings Down

Monday, April 2nd 2001, 12:00 am
By: News On 6

NEW YORK (AP) - American Express, the New York-based financial and travel giant, said Monday that its earnings for the first quarter and the year would be significantly lower than expected.

It said first-quarter figures could be 18 percent below the 48 cents a share earnings of a year earlier, or about 39 cents a share. The company in a statement blamed losses of about $185 million ``from the write-down and sale of certain high-yield securities held in the investment portfolio of its subsidiary, American Express Financial Advisors.''

Analysts surveyed by First Call/Thomson Financial had expected the company to report earnings of 51 cents a share for the first quarter.

In early trading, investors sent shares down $2.09, or more than 5 percent, to $39.21, on the New York Stock Exchange.

The lower first-quarter performance and the weakening economy are also expected to result in full-year profits that are ``lower than its initial forecast'' unless the economy and markets strengthen substantially, the company said.

Analysts had expected earnings this year of $2.27 a share, compared with $2.07 in 2000.

The company said that despite the economic downturn, its travel service was expected to post solid earnings.

It projected that first-quarter earnings for travel services would rise 13 percent to 15 percent. American Express said the gain came despite ``a slowdown in worldwide billed business growth ... as the economy and spending by corporations weakened globally.''

American Express said its pretax losses of about $185 million in the first quarter from the write-down and sale high-yield securities compared with write-downs of about $18 million a year earlier and $49 million in the fourth quarter of 2000.

``The high-yield losses announced today reflect the continued deterioration of the high-yield portfolio and losses associated with selling certain bonds,'' the company said.

It did not give specifics on the investments that went sour.