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Amex charges up 3Q profit
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October 23, 2000: 1:34 p.m. ET
Credit card company posts 3Q earnings of 54 cents, matching forecasts
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NEW YORK (CNNfn) - American Express Co., the world's biggest single issuer of credit cards, reported third-quarter profit Monday that matched Wall Street forecasts as its clients charged up more on its multi-colored cards.
Net income rose 14 percent to $737 million, or 54 cents a diluted share, from $648 million, or 47 cents a share, a year earlier. The results matched the average forecasts of analysts surveyed by First Call/Thomson Financial. Revenue rose 13 percent to $5.55 billion.
The 150-year-old firm joins the ranks of other banks and financial institutions that have benefited from the American penchant to put it on plastic, reflected in the nation's near-record-low savings rate. Savings slipped to an all-time low in August, according to figures compiled by the U.S. Commerce Department.
In particular, American Express gained additional interest income in the third quarter as its Blue Card customers begin paying interest on their balances at the regular 9.9 percent rate. American Express launched the card in the spring with a zero percent rate for six months. The card, which carries no annual fee, offers a competitive interest rate and allows holders to carry a balance, guarantees the security of e-commerce purchases.
 While the number of Visa and MasterCard credit cards in circulation dwarfs the number of American Express cards, American Express does not distribute its cards through commercial banks, making it the biggest sole issuer of cards in the world.
The company's travel-related services division, which oversees its credit card business as well as vacation packages and travelers checks, saw a 14 percent increase in income during the quarter, reflecting higher billed business as well as strong growth in cardholder loans. The number of cards circulating among American Express clients rose 13 percent to 5.6 million.
In its financial advice operation, which sells investment products and offers financial advice for card members, the company posted earnings of $269 million, up 12 percent from $240 million a year earlier. Stock market gains and sales of investment accounts including mutual funds helped the company collect more fees on the assets it manages for its customers.
For the first nine months, the New York-based company said it earned $2.13 billion, or $1.57 a share, up 14 percent from $1.87 billion, or $1.36 a share, a year ago. Revenue rose 15 percent to $16.37 billion.
Founded in 1850, American Express is a global travel, financial and network services provider, best known for its credit cards. Shares of American Express (AXP: Research, Estimates) slipped 69 cents in mid-afternoon trade Monday to $55.38. 
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American Express
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