More job cuts expected this year
American Express reported a 58% drop in income for the first quarter of 2009, from $1bn to $443m.
Its commercial division which include American Express Business Travel and corporate cards said its income had dropped 43% for the first three months from $151m in 2008 to $86m.
Amex said total revenues net of interest expense for the division fell by 17% $944m because reduced spending by corporate cardmembers and lower travel commissions and fees.
Daniel Henry, Amex's executive vp and chief financial officer, said the company would implement further cost cuts this year.
"We're going to work very hard to execute against the reengineering that we put in place in the fourth quarter of last year so that we get the full benefit as we go through this year," he said.
"As I indicated, we actually are going to have another round of reengineering, have additional actions including additional reductions in staff, so we do think there's additional flexibility in our business model and we will utilize those levers."
Amex announced 7,000 job cuts last October and reported a 72% fall in income for the last quarter of 2008.
Amex said that in the first quarter of 2009, net income dropped by 56% to $437m compared with the same period in 2008.
But expenses fell by 22% to $3.6bn in the quarter.
Kenneth Chenault, chairman and ceo, said: "We made very good progress this quarter on each of our key priorities - to stay liquid, to stay profitable, and to selectively invest for growth.
"At a time when some parts of the card industry were incurring substantial losses, we remained solidly profitable thanks, in part, to our flexibility in adapting to a very difficult economic environment and the diversity of our business model.
"Strong contributions from merchant services and bank card processing on our network continued to provide us with a competitive advantage.
"We generated earnings of $443m, despite substantial additions to our lending reserves and slower cardmember spending this quarter.
"Spending levels reflected the severe recessionary environment, but remained fairly consistent throughout the quarter."
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