In other items: Netflix's DVD-rental profits more than double; higher energy prices fuel Occidental Petroleum's 74 percent higher profit; fuel, operating costs slam Union Pacific's profits; and Kimberly-Clark's profits dip.
Fourth-quarter earnings for American Express surged 17 percent, helped by record card-member spending, higher average card-member lending balances and strong travel sales, the financial-services company reported yesterday.
For the three months ending Dec. 31, 2004, quarterly income was $896 million, or 71 cents per share, up from $763 million, or 59 cents per share, in the year-ago period. Revenue was $7.77 billion, up 10 percent from $7.04 billion a year ago.
Wall Street had expected 70 cents per share on revenue of $7.5 billion during the quarter.
The company said increased revenue from higher client-asset levels at American Express Financial Advisors also boosted its quarterly results.
Shares of American Express, one of the 30 Dow industrials, rose 67 cents to close at $52.60 yesterday. The stock has traded in a 52-week range of $47.32 to $57.05.
For the full year, the company reported net income of $3.45 billion, or $2.68 per share, up 15 percent from last year’s $2.99 billion, or $2.30 per share. Excluding accounting charges, the company earned $2.74 for the full year, up from $2.31 per share, a year ago. Revenue was $29.12 billion, up 13 percent from last year’s $25.84 billion.
Analysts expected earnings of $2.73 a share on revenue of $28.38 billion.
Fourth-quarter profit for online DVD-rental pioneer Netflix more than doubled as the company continued to broaden its audience despite stiffening competition from its much larger rivals.
DVD-rental profits more than double
Netflix yesterday said it earned $4.8 million, or 8 cents per share, during the final three months of last year. That compared with net income of $2.3 million, or 4 cents per share, during the same 2003 period.
Revenue for the quarter totaled $143.9 million, a 77 percent improvement from the prior year. Netflix recorded the healthy sales gains despite an 18 percent price reduction made to counter an intensifying threat from video-rental giant Blockbuster.
If not for several expenses unrelated to its ongoing business, Netflix said it would have earned 14 cents per share, toppling Wall Street’s expectations of 10 cents per share.
The results were released after the stock market closed yesterday. Netflix’s shares gained 10 cents to finish at $11.14, then surged $1.61, or 14 percent, in extended trading.
For all of 2004, Netflix earned $20.8 million, or 32 cents per share, on revenue of $506.2 million. In 2003, Netflix earned $6.5 million, or 10 cents per share, on revenue of $272.2 million.
Occidental Petroleum’s fourth-quarter profit improved 74 percent amid higher prices for crude oil, natural gas and chemicals.
Higher energy prices fuel 74 percent higher profit
The petroleum company said yesterday its net income increased to $665 million, or $1.64 a share, from $382 million, or 97 cents a share, in the fourth quarter a year ago.
The latest period includes total charges of about $69 million, or 17 cents a basic share.
The Los Angeles-based company’s profit before those charges totaled $1.85 a share, below Wall Street’s earnings estimate of $1.92 a share.
Occidental calculated its fourth-quarter adjusted earnings by excluding charges from its core earnings of $670 million, or $1.68 a share. A year earlier, Occidental had core earnings of $383 million, or 99 cents a share.
For the full year, Occidental earned $2.5 billion, or $6.21 a share, on revenue of $11.4 billion. Last year it earned $1.5 billion, or $3.93 a share, on sales of $9.2 billion.
Shares of Occidental rose 17 cents to close at $57.80 yesterday.
Union Pacific, which operates the nation’s largest railroad, reported yesterday an 86 percent drop in net income for its fourth quarter, citing high fuel prices, increased operating costs and a charge for asbestos claims.
Fuel, operating costs slam railroad profits
It warned that earnings for the first quarter will be below Wall Street expectations.
Net income was $79 million, or 30 cents a share, for the period ended Dec. 31, compared with net income of $551 million, or $2.12 a share, a year ago. Revenue was $3.2 billion, up from $3.0 billion a year ago.
Without the $154 million asbestos charge, Union Pacific would have earned 88 cents a share from continuing operations, 4 cents a share higher than forecast by analysts and 1 cent higher than Union Pacific’s own outlook issued last month.
The railroad has suffered all year from an unexpected burst of business and has responded by hiring more people and adding locomotives to its fleet.
Shares of Union Pacific fell $1.47, or 2.4 percent, to close at $58.94 yesterday.
For the year, Union Pacific earned $604 million, or $2.30 a share, down from $1.6 billion, or $6.04 a share, a year ago. Revenue for the year rose to $12.22 billion from $11.55 billion in 2003.
Consumer-products giant Kimberly-Clark said yesterday its fourth-quarter profit fell 3 percent as tough competition dragged down prices of diapers and training pants.
Profits dip; investors don’t get out Kleenex
The results beat Wall Street’s expectations, however, after accounting for Kimberly-Clark’s spinoff of its pulp business. Revenue rose nearly 8 percent.
The company also said it plans to boost its dividend 12.5 percent in April and buy back at least $1 billion in stock this year.
Kimberly-Clark, which makes Kleenex tissues and Huggies diapers, earned $445.3 million, or 91 cents per share, in the October-December period, compared to $459.5 million, or 91 cents per share, a year earlier.
Excluding a $4.5 million loss from a paper unit that Kimberly-Clark spun off in November, the company said it would have earned 92 cents per share, which it compared to 88 cents per share a year earlier without the pulp business. Analysts had expected 90 cents per share.
Its shares rose 62 cents to close at $64.40 yesterday.
Compiled from The Associated Press and Dow Jones Newswires