Stock Price Inches up as American Express Settles Anti-Trust Cases

American Express Company (AXP) yesterday, settled two class-action lawsuits by agreeing to change some of its credit and charge card policies. The settlement comes after extended litigation with merchants and retailers who claimed that Amex’s card practices had driven up their costs. Shares of American Express were up 0.3% in after hours, after closing at $86.4 yesterday during normal trading session.

According to the terms of the agreement, American Express has agreed to relax its previous rules that had limited merchants’ ability to add a surcharge to customers who used Amex cards. Amex also agreed to pay $75 million in litigation charges related to attorney fees in the two cases which began almost a decade ago. The plaintiff in one of the cases was Marcus Corp., a Milwaukee, WI-based hotel and theatre operator, which had sued American Express and called the company’s transaction fee policies exuberant and predatory.

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American Express Posts Earnings in Line With Estimates

American Express Company (AXP), the country’s third-largest card payment network, announced fourth quarter (4Q) earnings for its fiscal year 2013 (FY13), which ended December 31. In the conference call yesterday, the company said that net income for the quarter was just over $1.3 billion, almost double the earnings of $637 million in 4QFY12.

Quarterly earnings per share (EPS) came in at $1.21, a considerable jump from $0.56 in 4QFY12, while revenues for the quarter increased 5% to $8.54 billion. Adjusting for one-time litigation costs arising from its recent class action settlement with merchants, AmEx’s comparable EPS was $1.25, in line with analysts’ mean estimates.

Quarterly revenues were also in line with estimates, with total expenses for the quarter down 8% to $6 billion. At the open AmEx’s share price was up 4%.

For the full fiscal year 2013, AmEx reported revenues of $32.9 billion, up 4% from 31.5 billion a year ago, while per-share earnings jumped 25% to $4.88 in. Net income for the year also increased 20% to $5.36 billion. The favorable numbers were driven predominantly by global AmEx card member spending, which rose 8%. This was helped by increased domestic retail spending in the holiday season. Rising card payment volumes in emerging markets further contributed to the company’s growing bottom line.

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American Express Company Description

American Express Company (AXP), founded in 1885, is a global financial services provider. Its key products include credit and charge cards, corporate and business cards, expense management, travel services, and stored value products and services. The company generated $31.6 billion in revenues during 2012. Its primary source of income is the discount revenue it charges on various cards. American Express’s business segments include US Card Services, International Card Services, Global Commercial Services, Global Network & Merchant Services, and Corporate and Other. The United States is the largest geographic segment of the company, while the Asia-Pacific is the region with the highest revenue growth.  Read More: AXP

As holidays near, AmEx keeps eye on small retailers

American Express Co. is largely viewed as an upscale charge card company, but it’s increasingly on the pulse of what’s going on with small business.

With the holidays approaching, AmEx will focus on small merchants who’ll take in billions of dollars in sales charged on American Express cards. Susan Sobbott, who heads the company’s small business operation, American Express Open, says that based on what she’s seeing, the holidays may not be the most robust for small retailers, but stores should show sales gains compared with last year.

AmEx keeps tabs on how optimistic small businesses are. A survey in September showed that 62 percent of retailers had a positive view of the economy, compared to 56 percent of small businesses overall. Half the retailers surveyed expected their revenue to rise over the next six months, compared to 43 percent of all businesses. Read more.

AmEx picks JetPay for cut-rate small-merchants program

JetPay Corp., the Berwyn-based electronic payments processor headed by former MAC Card head Bipin Shah of Rosemont, is the first transaction-processing company to start handling American Express Corp. transactions under a new AmEx program for merchants that bill less than $1 million in AmEx transactions a year.

Check out JetPay's AmEx service here. Rival Transfirst is doing this, too. Others are expected to sign up, extending American Express cards to small restaurants and other businesses at reduced rates. Under a program AmEx calls "Opt Blue," AmEx is using the processors to offer small merchants a fee below its usual interchange rate (typically 3.5% or more). Read more.

ThermoGenesis Announces Strategic Reorganization Initiative

ThermoGenesis Corp. (KOOL) today announced a strategic reorganization initiative designed to better align resources with its expected cord blood revenue streams, increase its internal clinical resource capabilities and provide greater focus on new application development to improve the Company's market competitiveness and to speed AXP(R) AutoXpress(R) Platform (AXP) adoption in developed and emerging markets.

The Company expects these changes will enable it to generate cash from its cord blood business in the coming two to three quarters in addition to realigning its professional resources to support its rapid expansion into the regenerative medicine space. "One of our primary objectives is to continue to invest in our AXP Platform and clinical resources needed to further expand the system's clinical intelligence and technological functionality. In this way, we can better meet the evolving cell processing needs of our cord blood customers and expand its use into our vascular and orthopedic cell therapy initiatives," said Matthew Plavan, Chief Executive Officer of ThermoGenesis. Read more.

See How American Express Ranks Among Analysts Top Dow 30 Picks

A study of analyst recommendations at the major brokerages shows that American Express Co. (NYSE: AXP) is the #27 broker pick, on average, out of the 30 stocks making up the Dow Jones Industrial Average, according to ETF Channel. Within the broader S&P 500, when components were ranked in terms of analyst favorites.

In forming this rank, the analyst opinions from the major brokerage houses were tallied, and averaged; then, the underlying components were ranked according to those averages. Investors often interpret analyst opinions from different angles when companies have a low rank among analysts, it isn’t necessarily the case that investors should conclude that the stock will perform poorly. It can, of course, but a bullish investor could also take the contrarian angle and read into the data that there is lots of room for upside because the stock is so out of favor. Read more.