American Express Beats on Earnings (AXP)

American Express, AXP posted third quarter earnings of $0.74 per share, which is $0.15 better than consensus estimate of $0.59 per share. The company’s revenue totaled $7.16 billion vs. analysts’s estimates of $7.31 billion in revenue. Consolidated provisions for losses totaled $1.4 billion, up 51% from a year ago. The third quarter net loan write-off rate in the U.S. Card Services segment was 5.9%, up from 5.3% in the second quarter.

The company believes consumer and business sentiment is likely to deteriorate further, translating into weaker economies around the globe well into 2009. Cardmember spending is likely to remain soft. Loan growth will be restrained partly because of company efforts to reduce credit risks.

The shares were up in the after market hours trading. This was also a bullish pick for OPNewsletter. We’ll see how it performs when market opens. Albeit, Moody’s Investors Service lowered the long-term senior ratings of American Express Co. (Amex) to ‘A2’ from ‘A1’, citing negative asset quality trends and lending exposures, particularly within geographic markets in the United States that have experienced sharp home price declines. According to the report, about $75 billion of debt securities are affected by the action. The rating outlook is negative.

On the other hand Texas instruments (TXN) missed on both revenue as well as earning’s estimates. To make matter worse, TXN has also lowered the guidance. The week is packed with action, we have lot of companies announcing results including Caterpillar (CAT), Coach (COH), Manpower (MAN), Pfizer (PFE) and US Bankcorp (USB) to name a few that are going to set the tone for market action today.

Profitable trading, OP






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