American Express Profit Rises 30%
American Express, one of the leading financial-services firms, said Wednesday that its first-quarter profit rose 30% over a year ago on a 19% rise in revenue.
The New York-based company reported net income of $152 million for the three months ended March 31, compared to $116 million. Revenue in the quarter increased to $3.4 billion from last year’s $2.9 billion.
James D. Robinson III, chairman and chief executive, said the company’s IDS Financial Services unit had a “truly superb performance” with a 28% gain in net income to $16 million. The travel-related services business posted a 20% gain in net income to $86 million.
Net income from its investment service business rose 25% to $31 million, including effects of the acquisition of Lehman Bros. Kuhn Loeb Holding, which was acquired May 11.
Southern Pacific Income Drops 43% in Quarter
First-quarter income at Santa Fe Southern Pacific plunged 43% because of a large falloff in rail traffic, the Chicago-based conglomerate reported.
The firm reported earnings of $61.6 million for the first three months of 1985, compared to $107 million for the same period a year ago. The lower results were caused largely by operating losses of $4.3 million from rail operations, Chairman John J. Schmidt said.
The Santa Fe Railway unit made $22 million in the quarter, down from $45.8 million last year. Southern Pacific Transportation lost $26.3 million, compared to profits of $8.9 million a year ago.
Major Banks, Thrifts Post Strong Profits
First Interstate Bancorp’s first-quarter profits were at near-record levels despite large loan losses, the company reported.
Manufacturers Hanover Trust and Great Western Financial, two of the nation’s largest financial institutions, also posted strong first-quarter profits, rising 19.3% and 27%, respectively.
Los Angeles-based First Interstate, the nation’s eighth-largest bank holding company, said it earned $71.5 million for the first three months of 1985, up 12.2% from the quarter a year earlier. The earnings were the second best in the company’s history, just 4.4% below the record $74.8 million posted for the final three months of 1984.
Chairman J. J. Pinola said the improvement came primarily from a 15.8% increase in net interest income, reflecting a strong demand for loans, and a 17% gain in non-interest income, led by service charges, trust activities and corporate finance.
But he said the gains were partly offset by relatively high set-asides for bad loans, coupled with substantial levels of non-performing loans.
Manufacturers Hanover, based in New York and parent to the No. 4 bank in the country, said its first-quarter income rose to $100.2 million from $84.0 million a year earlier. The company had a gain of $14.4 million after taxes from the sale of stock and other securities that it had acquired earlier in loan transactions. Last year’s results included a $3.2-million after-tax gain from such sales.
Great Western Financial, the Beverly Hills-based holding company for Great Western Savings, posted first-quarter profits of $31.9 million, compared to $25.1 million a year ago.
