American Express warned today that first-quarter earnings per share will be about 18 per cent below the 48 cents earned in the year earlier period, mainly due to write-downs on securities in its high-yield portfolio.
The company is expecting pre-tax losses of about $185 million from write-downs and sales of securities in the portfolio, which is held by its American Express Financial Advisors unit.
For the full year, the company is expecting earnings growth to come in at the low end of its 12-15 per cent target, as the weak economy and recent turmoil in the equity markets take effect.
The recent turbulence in the markets "has made projection difficult," the company said in a statement.
"Moreover, there have been few signs of a pickup in economic activity or spending by corporate customers," it said.
As a result, earnings growth for the full year "is likely to be lower than its initial forecast unless the economy and the markets strengthen substantially during the remainder of 2001", it said.