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Amex profit falls
April 23, 2001: 12:56 p.m. ET

Charge card firm reports its profit fell 18 percent on bond losses
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NEW YORK (CNNfn) - Financial services provider American Express Co. saw its first-quarter profit decline 18 percent because of bond losses and slack spending by corporate customers.

The New York-based company, which also manages money and sells travelers checks, earned $538 million in the first quarter, or 40 cents a share, compared with $656 million, or 48 cents a share, a year earlier. Shares of American Express (AXP: down $1.40 to $40.10, Research, Estimates), one of the components of the Dow Jones industrial average, lost ground in Monday trading following the slightly better than projected results.

American Express warned April 2 that it expected to see earnings per share fall to 39 cents due to losses in its bond portfolio. Before that warning analysts surveyed by earnings tracker First Call were looking for EPS of 51 cents in the period.

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The company Monday repeated its April 2 guidance that it no longer believes that its earnings per share for the year will meet its earlier goal of 12 percent growth this year. Analysts are now projecting no growth in EPS this year, with their $2.07 forecast matching last year's results. Their forecasts stood at $2.27 before the warning.

The company said that consolidated net revenue gained 2 percent to $5.4 billion in the quarter.

Travel related services, which includes the company's credit card business, saw net income rise 16 percent to $522 million. But American Express Financial Advisors, which was the division hit by the bond portfolio problems, saw net income fall 79 percent to $51 million. Even without the bond losses, the company said earnings from the division were still off 29 percent in the period. graphic