American Express Says Profit Falls 56%
Travel and financial services company American Express Co. said fourth-quarter profit fell 56% as fewer people traveled by air after the Sept. 11 terrorist attacks.
Net income dropped to $297 million, or 22 cents a share, from $677 million, or 50 cents. Revenue fell 3% to $5.87 billion. For the year, net income was $1.31 billion, a 53% decline from 2000 and its first drop since 1994.
American Express is cutting about 15% of its work force and paring expenses as it copes with an economic slowdown that has sapped its credit card and asset management businesses. Thousands of workers, including Chief Executive Kenneth Chenault, were displaced from its New York headquarters when the World Trade Center collapsed.
Chenault announced in December that severance and related costs for the most recent round of job cuts would reduce fourth-quarter profit by as much as $280 million, before taxes.
The results fell short of the average analyst estimate of 23 cents, according to a poll by Thomson Financial/First Call.
American Express shares fell 70 cents to close at $36.29 on the New York Stock Exchange.
Other company earnings, excluding one-time gains and charges unless noted:
* Safeco Corp., a property casualty insurer based in Seattle, said fourth-quarter profit fell 16% because of losses related to Enron Corp.’s collapse, an increase in claims from the terrorist attacks and larger-than-expected homeowner claims. Net income fell to $8.6 million, or 6 cents a share, from $10.2 million, or 8 cents, a year earlier. Revenue was little changed at $1.67 billion.
* Tyson Foods Inc., the largest U.S. producer of beef, chicken and pork, said fiscal first-quarter profit jumped nearly fivefold, boosted by added sales from its newly acquired IBP beef business. Net income at the Springdale, Ark.-based company rose to $126.9million, or 36 cents a share, in the quarter ended Dec. 29, from $27 million, or 12 cents, a year earlier. Earnings beat Wall Street esteimates and met the high end of the company’s revised numbers provided earlier this month. Revenue climbed to $5.86 billion from $1.77 billion.
* Drugstore.com Inc., a Bellevue, Wash.-based seller of pharmaceuticals via the Internet, said its fourth-quarter loss more than quadrupled after the company wrote down the value of some assets. The loss widened to $182.9million, or $2.75 a share, from $43.2 million, or 68 cents, a year earlier. Sales rose 20% to $43.5 million. For the first quarter, the company forecast sales of about $40 million and expects to add 190,000 customers. It predicted a loss before interest, taxes, depreciation and amortization of $25 million to $26 million for the year.
Tupperware Corp., a maker and direct seller of plastic storage containers, said fourth-quarter profit rose 30% as sales through mall kiosks, television and the Internet increased. Net income rose to $28.5 million, or 48 cents a share, from $21.9 million, or 38 cents, a year earlier. Sales rose 10% to $326.7 million on higher Tupperware sales in U.S. and Latin American markets. Sales fell in Europe and Asia; the company said it had to discount to stimulate sales, especially in Europe.
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Earnings Preview
A sampling of companies expected to report quarterly earnings today, ranked by estimated year-over-year growth in operating earnings per share (EPS), compiled by Thomson Financial/First Call.
Ticker Analystsears Year-ago Year-over-
Company symbol est EPS qtr. year % chg.
Guidant GDT $0.47 $0.41 +15%
Exelon EXC 0.88 0.78 +13
Pitney Bowes PBI 0.57 0.55 +4
El Paso Energy EP 0.79 0.78 +1
McGraw-Hill MHP 0.54 0.54 0
Coca-Cola KO 0.37 0.38 ednesday3
Gillette G 0.32 0.33 ednesday3
Illinois Tool Works ITW 0.64 0.66 ednesday3
Pulte PHM 1.88 2.01 ednesday6
Kellogg K 0.30 0.35 ednesday14
Goodrich GR 0.68 0.80 ednesday15
Honeywell HON 0.55 0.70 ednesday21
Snap-On SNA 0.51 0.66 ednesday23
Black & Decker BDK 0.72 0.98 ednesday27
Plum Creek PCL 0.23 0.32 ednesday28
Veritas Software VRTS 0.13 0.19 ednesday32
Williams WMB 0.39 0.57 ednesday32
ChevronTexaco CVX 0.90 2.40 ednesday63
Marathon Oil MRO 0.41 1.25 ednesday67
Meredith MDP 0.14 0.47 ednesday70
Unocal UCL 0.23 1.04 ednesday78
Hilton Hotels HLT 0.00 0.16 ednesday100
Louisiana-Pacific LPX ednesday0.55 ednesday0.27 NM
United States Steel X ednesday1.00 ednesday0.67 NM
Brunswick BC ednesday0.03 0.48 NM
Qwest Q ednesday0.06 0.16 NM
AT&T; Wireless AWE ednesday0.06 0.16 NM
Notes: NM = not meaningful. A loss in any period makes percentage change not calculable. Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.
For more information on First Call, check www.firstcall.com.
