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COST Costco Wholesale Corporation

732.28
0.20 (0.03%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type
Costco Wholesale Corporation NASDAQ:COST NASDAQ Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.20 0.03% 732.28 731.40 732.63 734.90 728.32 733.97 1,767,628 23:58:07

American Express Posts Lower Earnings, Revenue

20/01/2017 12:00am

Dow Jones News


Costco Wholesale (NASDAQ:COST)
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By Anne Steele and Robin Sidel 

American Express Co. posted lower results in the final quarter of the year as it ramped up spending on growth initiatives and said it is making progress in efforts to jump-start its business.

Shares edged down 1% to $75.86 in after-hours trading Thursday.

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

"While we continue to operate in a very challenging environment, we ended the year in a stronger position than we started and have built momentum across our business," Chief Executive Kenneth Chenault said in a news release.

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

The company is continuing to feel the impact of the end last year of its longtime card partnership with Costco even as it tries to retain Costco customers by offering them new cards.

AmEx's revenue fell 4.4% to $8.02 billion. Excluding the Costco business and the impact of a stronger U.S. dollar, revenue rose 6%.

Card member spending grew 7% during the quarter, excluding the impact of Costco in the year earlier-period and the effect of the stronger 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.

"Spending by large corporations remained weak," said Chief Financial Officer Jeffrey Campbell in a conference call with analysts.

Best known for its charge cards that require customers to pay their bills in full every month, AmEx is expanding its credit-card portfolio allowing customers to carry a balance. The company also last year ramped up marketing and promotions on its platinum charge card.

AmEx said credit quality remained strong and is performing better than it had expected. Still, the company is likely to set aside more money to cover potential loan losses in the future.

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.

Write to Anne Steele at Anne.Steele@wsj.com and Robin Sidel at robin.sidel@wsj.com

 

(END) Dow Jones Newswires

January 19, 2017 18:45 ET (23:45 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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