" data -reactid = "11"> – By Sydnee Gatewood
Financial services company American Express Co. (AXP) reported fourth-quarter and full-year earnings after the closing bell on Thursday, announcing it will temporarily suspend its program to repurchase shares as a result of the Law on Tax Cuts and Jobs.
The New York City-based company posted adjusted earnings per share of $ 1.58, surpassing Thomas Reuters estimates of $ 1.54. Quarterly income of $ 8.84 billion exceeded expectations of $ 8.72 billion and increased 10% over the previous year's quarter due to the record expenses of card members.
For the year, adjusted earnings were $ 2.97 per share. 19659006] Following the announcement, the share fell more than 2% in post-closing operations.
The following chart illustrates the trend in the growth of American Express's revenues over the last decade.
The company registered a single charge of $ 2.6 billion related to the recent fiscal review, which, according to CNBC, led American Express to record its first quarterly net loss in more than two decades.
Kenneth Chenault, president and CEO, who retires in February after 17 years on paper, said that while the impact of the Tax Law has forced the company to suspend its buyback program for the first half of the year to rebuild capital, he believes that the long-term effects of the legislation will be positive.
"In general, we believe that the Tax Law will be a positive development for both the US economy and American Express," he said. "Given the momentum in the business and the anticipated benefit of a lower tax rate, we now expect to invest up to $ 200 million more in 2018 than we originally planned for customer-oriented growth initiatives."
Despite suspending share repurchases, the company will continue to pay its regular dividend.
For fiscal year 2018, the company forecasts earnings per share in the range of $ 6.90 to $ 7.30.
With a market capitalization of $ 89.68 billion, American Express closed at $ 99.86 on Thursday. GuruFocus estimates that the stock gained 34% in 2017 and has risen 1% so far this year.
As this is the last quarterly report of Chenault before retiring, he concluded with reflections on last year and confidence in his successor.
I feel very good about the progress we have made during 2017 and I will leave American Express in very strong hands when Steve Squeri succeeds me as president and CEO later this month, "he said.
Disclosure: I do not own no action mentioned.
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