American Express Q2 Profit Beats View, but Outlook Still Cautious (AXP)

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Credit card issuer American Express Company ( AXP ) on Friday said its second quarter profit nearly tripled from last year, beating analyst estimates, but offered cautious commentary about its overall economic outlook.

The New York-based company reported second quarter net income of $1.02 billion, or 84 cents per share, compared with $337 million, or 9 cents per share, in the year-ago period. Last year's results were hampered by the repurchase of millions of preferred shares from the federal government, a by-product of the massive banking bailout plan.

On average, Wall Street analysts expected a smaller profit of 78 cents per share.

AmEx said that revenue, net of interest expense, rose 13% from last year, to $6.9 billion. Still, the company warned it wouldn't see similar earnings gains in the second half of the year. CEO Kenneth Chenault commented, "We remain cautious about the economy and the challenging regulatory environment."

American Express shares fell 34 cents, or -0.8%, in premarket trading Friday.

The Bottom Line
Shares of AXP have a dividend yield of 1.67%, based on last night's closing stock price of $43.19. The stock has technical support in the $38-$40 price area. If the shares can firm up, we see overhead resistance around the $45-$48 price levels. We would remain on the sidelines for now.

American Express Company ( AXP ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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