Slashing of jobs has begun (Full Text version)

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An honorable member of the Coffee Shop Has Just Posted the Following:

American Express to cut more than 4,000 jobs over this year
Everett Rosenfeld | @Ev_Rosenfeld

American Express said it plans to cut more than 4,000 jobs over the next year.

A representative for the company told CNBC that it is planning to cut the jobs but that this is only a gross figure, and that the firm will also continue to hire selectively in parts of the organization. Additionally, American Express reported quarterly earnings that slightly beat analysts' expectations on Wednesday, and CEO Ken Chenault said in a release that "tight controls on the cost side of the ledger" had benefited the company.

The company posted fourth-quarter earnings per share of $1.39 per share, compared with $1.21 a share in the year-earlier period.

Revenue for the quarter came in at $9.1 billion, against the comparable year-ago figure of $8.5 billion.

Analysts had expected American Express to report earnings of about $1.38 a share on $8.53 billion in revenue, according to a consensus estimate from Thomson Reuters.

After an initial post-earnings positive jump, the company's stock fell about 2 percent in after-hours trading.

"Solid results this quarter reflected the underlying themes that have characterized our performance throughout 2014: higher Card Member spending, increased loan balances, tight control of operating expenses and a substantial return of capital to shareholders through share repurchases," Chenault said in a release.

The company said fourth-quarter card member spending rose 6 percent, 8 percent if adjusted for foreign exchange. American Express also revealed that volumes for the year crossed the trillion-dollar mark for the first time.

The credit card issuer's revenue was also helped by a $453 million post-tax gain from the sale of its investment in Concur Technologies.

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All told, the company had a 2014 with a "healthy balance sheet that enabled us to return a substantial amount of capital to shareholders in the form of repurchases over the past year," CFO Jeffrey Campbell said on the Wednesday earnings call.

Still, Campbell said that "there was some complexity" to the quarter and year, including "incremental initiatives" like a restructuring and investments in growth.

In the release, Chenault highlighted the company's control of expenses.

"Tight controls on the cost side of the ledger continued to give us the flexibility to invest in growth opportunities. And, as in the second quarter, a substantial gain allowed us to accelerate some critical initiatives: re-engineering to make American Express more efficient; renewing a key partner relationship; and making additional investments to grow our business and drive innovation in the world of payments and commerce.

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Chenault allowed that American Express still faces "competitive and regulatory challenges."

Competition may be heating up in the payments sector, but Chenault said in November that the company was welcoming the marketplace's rapid innovation.

"You have to have this spirit of reinvention, and that is what we have in the DNA of the company," Chenault said at a November conference. "If you don't innovate, you die. You have to constantly innovate, you have to constantly challenge the status quo."
The company's third-quarter profits beat Wall Street estimates, but its revenue was in line with expectations.

—CNBC's Ryan Ruggiero contributed to this report.


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