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American Express Company Reports Operating Results (10-Q)

October 31, 2012 | About:

10qk

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American Express Company (AXP) filed Quarterly Report for the period ended 2012-09-30.

American Express Co has a market cap of $63.2 billion; its shares were traded at around $55.53 with a P/E ratio of 12.8 and P/S ratio of 2.2. The dividend yield of American Express Co stocks is 1.4%.

Highlight of Business Operations:

Return on average segment capital is calculated by dividing (i) one-year period segment income ($2.9 billion and $2.7 billion for the twelve months ended September 30, 2012 and 2011, respectively) by (ii) one-year average segment capital ($8.9 billion and $7.8 billion for the twelve months ended September 30, 2012 and 2011, respectively). Return on average tangible segment capital, a non-GAAP measure, is computed in the same manner as return on average segment capital except the computation of average tangible segment capital, a non-GAAP measure, excludes from average segment capital average goodwill and other intangibles of $391 million and $436 million as of September 30, 2012 and 2011, respectively. The Company believes that return on average tangible segment capital is a useful measure of the profitability of its business.

Return on average segment capital is calculated by dividing (i) one-year period segment income ($691 million and $670 million for the twelve months ended September 30, 2012 and 2011, respectively) by (ii) one-year average segment capital ($2.9 billion and $2.6 billion for the twelve months ended September 30, 2012 and 2011, respectively). Return on average tangible segment capital, a non-GAAP measure, is computed in the same manner as return on average segment capital except the computation of average tangible segment capital, a non-GAAP measure, excludes from average segment capital average goodwill and other intangibles of $1.4 billion and $1.2 billion as of September 30, 2012 and 2011, respectively. The Company believes that return on average tangible segment capital is a useful measure of the profitability of its business.

Return on average segment capital is calculated by dividing (i) one-year period segment income ($759 million and $661 million for the twelve months ended September 30, 2012 and 2011, respectively) by (ii) one-year average segment capital ($3.6 billion and $3.6 billion for the twelve months ended September 30, 2012 and 2011, respectively). Return on average tangible segment capital, a non-GAAP measure, is computed in the same manner as return on average segment capital except the computation of average tangible segment capital, a non-GAAP measure, excludes from average segment capital average goodwill and other intangibles of $1.8 billion and $1.9 billion for the twelve months ended September 30, 2012 and 2011, respectively. The Company believes that return on average tangible segment capital is a useful measure of the profitability of its business.

Return on average segment capital is calculated by dividing (i) one-year period segment income ($1.4 billion and $1.2 billion for the twelve months ended September 30, 2012 and 2011, respectively) by (ii) one-year average segment capital ($2.1 billion and $1.9 billion for the twelve months ended September 30, 2012 and 2011, respectively). Return on average tangible segment capital, a non-GAAP measure, is computed in the same manner as return on average segment capital except the computation of average tangible segment capital, a non-GAAP measure, excludes from average segment capital average goodwill and other intangibles of $205 million and $174 million as of September 30, 2012 and 2011, respectively. The Company believes that return on average tangible segment capital is a useful measure of the profitability of its business.

Corporate & Other had net expense of $531 million and $344 million for the nine months ended September 30, 2012 and 2011, respectively. Net expense for the nine months ended September 30, 2012 reflected an increase in occupancy and equipment costs, other operating expenses, and various investments in Enterprise Growth initiatives, partially offset by gains on foreign exchange investment contracts, gains on sales of investment securities, higher global prepaid income in the nine months ended September 30, 2012, and the favorable effects of revised estimates in the liability for uncashed international Travelers Cheques. Results for the nine months ended September 30, 2011 reflected $186 million and $129 million of after-tax income related to the MasterCard and Visa litigation settlements, respectively.

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