AmEx profit falls as cardholders struggle

[October 21, 2008]  NEW YORK (AP) -- American Express Co. says its profit fell 24 percent in the third quarter as cardholders spent less and defaulted more.

The credit-card issuer says its net income was $815 million, or 70 cents a share, in the July to September period. That is down from $1.07 billion, or 90 cents a share, in the same timeframe last year.

The profit is better than expected, however. Analysts polled by Thomson Reuters on average had predicted earnings of 59 cents per share, excluding one-time items. AmEx's income from continuing operations is 74 cents a share.

Amex's shares jumped 7 percent in after-hours trading.

The card company took a $1.36 billion provision for loan losses, 51 percent higher than its provision in the third quarter last year.

[Associated Press; By MADLEN READ]

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