NEW YORK (Reuters) - American Express (AXP) Co(N) reported quarterly earnings misses little Wall Street estimates and said it would cut 550 jobs as it handles more customer services on the Internet.
Shares of the company were 2.7 in afternoon trading after that the lender of credit card and payment processing network said it earned $ 1.1 billion, or 88 cents per share, in the fourth quarter. Which included a charge of 74 million, or 6 cents per share, for the deletions of jobs and the closure of customer service centres.
To the exclusion of the charge, profit the company of 94 cents per share missed estimates average analysts by a penny, according to Thomson Reuters I/B/E/s
The earnings miss is an unpleasant surprise to some investors, taking into account the positive trends on the spending volume and credit. American Express Chief Executive Kenneth Chenault cited "record levels" customer spending on their credit cards and credit thereof losses continued to shrink.
The job losses also relaunched investor concerns that financial regulation could hurt the company's future growth.
"You always want to streamline your existing operations to be more efficient... but if they expect a robust growth environment, you can see significant head count reductions pas said Ventures Intrepid payments consultant Eric Grover.".
Investors are wary of the potential effect of the U.S. financial regulation on American Express. Company's shares fell 8 percent last month, before largely after the Federal Reserve has proposed rules that would reduce fees that merchants pay banks whenever a customer buys something with a debit card.
American Express does not have a debit card company, credit card expenses are some of the highest in the industry and investors are concerned that he will lose business as merchants ask customers to pay with debit cheaper cards.
EDF indirectly rules "will have a negative impact on AmEx - this is a big problem," said Grover. "If merchants are able to discount, AmEx is going to get hit in a masterly way, and they will have to lower their prices."
American Express shares were down 3.1% to $44.91 in afternoon trading.
MOVEMENT OF JOBS AROUND
Sandler O'Neill analyst Michael Taiano, said that society can chose to reinvest more marketing profit and technology rather than reserve them for gains.
He told American Express scared investors by the income tax return on Wednesday, but waiting Street until Monday for a full explanation of manufacturing. Fourth-quarter results were not due until Monday.
"The problem with something like this is give you the number to the bottom line without all the details and people start to wonder," said.
Including restructuring costs, profit American Express will increase by almost half of the previous year of 716 million, or 60 cents per share. Decrease in loan losses leaves the company reduce the amount of money set aside for doubtful debts, boost profit.
More client American Express handling of day-to-day business by means of the Internet and their smartphones, reduce the number of calls to the company's service centres. The company said that he left many customer service vacancies after employees leave, which means he pays now rent and other costs of real estate for centres which are too big for its own purposes.
Approximately 3,500 jobs will be affected by changes in the service to customer, including about 3,000 will be moved to different locations. The company closes a customer service centre in Greensboro, North Carolina and send jobs to his three other U.S. customer service locations, Fort Lauderdale (Florida); Phoenix, Arizona. and Salt Lake City, Utah.
Society will relocate some jobs in Madrid to Britain and the Argentina and move support services for its map Japanese company in the Japan of the Australia.
American Express spokeswoman Joanna Lambert said some affected employees in the U.S. would be able to relocate to other centres for customer service jobs, and others would be able to work from home. American Express has informing employees of changes on Wednesday.
The company said that blows should generate additional costs of 60 million to $ 80 million this year, the future real estate closings and employee compensation-related. It provides complete the process by the end of the year.
Starting next year, American Express expects slaps to reduce spending 70 million per year.
(Statement by Joseph a. Giannone and Maria Aspan.) (Editing by Matthew Lewis, Robert MacMillan and John Wallace)
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