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Don’t Put American Express Stock on Your Credit Card

January 19, 2018

Via: TheStreet
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First quarterly loss since 1992. 1992? The year hair metal was replaced by grunge? The year the World Series left the U.S.? Yup, but there is a caveat. The firm took a $2.6 billion fourth-quarter charge related to the tax bill. Exclude that charge, and the firm reports $1.58, which beats by four cents. Include the charge, and American Express (AXP) sports a loss of $1.22 billion, or $-1.41 a share. Ouch!

Revenue was actually fine, growing 10.2% year over year. U.S. consumer services grew 44%. International consumer and network services more than doubled. The firm suffered an effective tax rate of 31%, which it expects to drop down to 22% in 2018. So, a lot of firms are taking tax-related charges without seeing significant damage to their stock prices. What’s different here?

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