* Fourth-quarter adjusted earnings $1.25/share vs est.
* Revenue up 5 pct at $8.55 bln
* Says has fraud controls on accounts affected by Target
By Aman Shah
Jan 16 Credit card company American Express Co
, which reported strong quarterly results on Thursday,
said it had seen 'minimal exposure' to the data breach at Target
Corp stores during the U.S. holiday shopping season.
American Express said it had fraud controls in place on
accounts affected in the theft, one of the biggest card breaches
About 40 million credit card records and 70 million other
records containing data on Target's customers were stolen in the
breach disclosed in December.
"The closed-loop is a big advantage for us, especially in
situations like this," Chief Financial Officer Jeff Campbell
said on a post-earnings conference call, referring to the
company's system of issuing its own cards in addition to
Earlier in the day, American Express reported a two-fold
jump in fourth-quarter profit as its affluent customers spent
more in the U.S. holiday season and fewer users defaulted on
"We ended the year on a strong note, with card member
spending up 8 percent despite mixed reports during the holiday
shopping season," Chief Executive Ken Chenault said in a
Concerns over debit and credit card safety have increased
after Target, the third-largest U.S. retailer, disclosed the
breach that lasted 19 days through Dec. 15.
Cards on American Express's platform are seen as safer than
those on Visa Inc and Mastercard Inc platforms due
to the 'closed loop' system.
American Express benefited from the holiday shopping season
in the United States, with billed business in its core market
growing 9 percent in the quarter ended Dec. 31, the highest
growth in six quarters.
"Even though overall growth in consumer spending has been
somewhat muted, the fact that American Express focuses on
affluent consumers is helping it grow its billed business," said
Janney Capital Markets analyst Sameer Gokhale.
U.S. retail sales increased 3.8 percent in the 2013 holiday
season, according to data released by the National Retail
Federation on Tuesday.
The same day, the U.S. Commerce Department said retail sales
including automobiles, gasoline stations and restaurants rose 1
percent from a year earlier in the October-December period. ()
American Express, a component of the Dow Jones industrial
average, said fewer customers defaulted on payments in
the quarter, with worldwide net lending write-off rate falling
to 1.6 percent from 2 percent, a year earlier.
Delinquency rates at credit card companies usually rise in
the fourth quarter as customers spend more during the holiday
season and then find it difficult to repay loans.
American Express's net profit rose to $1.31 billion, or
$1.21 per share, in the quarter from $637 million, or 56 cents
per share, a year earlier.
Excluding merchant litigation settlements reached last
month, earnings were $1.25 per share.
Total revenue, net of interest expense, increased 5 percent
to $8.55 billion.
Analysts on average had expected the company to earn $1.26
per share on revenue of $8.54 billion, according to Thomson
American Express shares gained about 55 percent in 2013,
outperforming the broader S&P 500 Index, which rose 30
percent in the year.
The stock closed at $87.78 on Thursday on the New York Stock