Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (66870)	4/2/2001 9:40:12 AM
From: Rarebird	Respond to of 116763

Now it's the Financial's Turn: American Express Sees 1Q Pretax Chg Of $185M Updated: Monday, April 2, 2001 09:19 AM ET American Express expects full-year earnings per share growth to be lower then its initial estimate of 12% to 15% unless the equity markets and economy strengthen "substantially." The company had initially said 2001 quarterly results would be uneven from quarter to quarter, with the most pressure on earnings in the first half. Analysts expect full-year earnings per share of $2.27, compared to $2.07 a share in 2000. The company's original 2001 outlook was based on expectations for a strengthening in the equity markets and economy in the "later part of the year." The company also based the outlook on "reengineering" plans expected to generate at least $500 million of expense savings, mostly in the second half. The plan remains on track, but the economy has further deteriorated with no sign of change or increase in corporate spending by corporate customers, the company said. An American Express spokesman said the reengineering will focus on improving efficiency and streamlining processes within the company. The move is "not about job cuts" but the spokesman said some jobs will inevitably be affected by changes. More details of the company's plans will be disclosed in the second quarter, the spokesman added. American Express said its write-downs reflect continued deterioration of its high-yield portfolio and losses associated with selling certain bonds. The losses follow a quarterly analysis of the portfolio items, including recent defaults on interest payments, financial data from issuers, assessments of expected future cash flows and the overall trends in the sector. The Financial Advisor unit's high-yield investments are expected at about $3.5 billion at the end of the first quarter, or about 11% of its total portfolio. The company expects narrower total losses on the investments for the remainder of 2001 than reported in the first quarter. American Express' Travel Related Services unit expects first quarter earnings to rise 13% to 15%, which reflects a slowdown in worldwide billed business growth, mostly in the latter part of the quarter from the weakened economy and lower corporate spending. The unit's year ago first quarter income rose 15% to $416 million from $363 million in 1999. American Express Financial Advisors expects first quarter earnings to be down about 80% due to the $185 million write-down and continuing weakness in global equities. Excluding high-yield losses the unit expects earnings to be down 30% for the quarter. The unit reported year ago first quarter income rising 15% to $245 million from $214 million in 1999. The Advisor's unit said investment product sales weakened in the quarter and management fee revenue is expected to decline from year ago levels. The unit continues to be hurt by narrower investment spreads, from the lagging benefit of lower interest rates, and higher compensation levels for advisors. First quarter pretax expenses at the Financial Advisors' unit will be about $67 million due to an adjustment to amortization of deferred acquisition costs for variable insurance and annuity products. Financial planning volumes at the unit are expected to be up "strongly" from year ago levels as clients worked to establish or modify their longer-term investment strategies.