Added by David Sandercock on October 21, 2010
American Express (AmEx) profit this quarter rose by 71 per cent, increase that beat both forecasts and expectations.
AmEx reported earnings amounting $1.1bn in Q3, as the company’s chief executive added that the increase happened in spite of the US government’s intention of reshaping the industry through legislative and regulatory changes.
Analysts had expected earnings of 85 cents per share, while AmEx managed to get 90 cents, 4 cents more than it was expected. Last year, the total profit of American Express amounted only $640m, 53 cents per share respectively.
American Express is currently intending to fight the antitrust lawsuit of the US Justice Department. The lawsuit has been said to be the most recent threat in matters of regulations for processing fee incomes that AmEx, together with its competitors such as MasterCard Inc and Visa Inc, had considered to be normal.
The regulation that has been set to be reformed through Dodd-Frank’s financial reform law wants to change the fact that merchants have to pay fees to both processing networks and banks for each credit card transaction made by customers who make a purchase.
Kenneth Chenault, AmEx chief executive, stated that the US government’s intervention in reforming the regulation will not lead to a positive result.