American Express (Amex) has reported a net loss of $1.19bn or $1.41 per share for the fourth-quarter of 2017 due to a one-time charge from the new tax law.
This is Amex’s first quarterly loss in 26 years. In the fourth quarter of 2016, the company posted a net profit of $825m or $0.88 per share.
For the quarter ended 31 December 2017, total revenues net of interest expense was $8.84bn, an increase of 10% compared to $8bn a year ago.
The increased revenue was driven by higher card member spending, loans and fees, the company in its earnings statement said.
The US Consumer Services division recorded a net income of $507m, an increase of 44% from $351m a year ago. Total revenues net of interest expense decreased 10% to $3.4bn.
Net income at International Consumer and Network Services division surged 136.9% to $199m from $84m a year ago. Total revenues net of interest expense increased 12% to $1.5bn against $1.4bn a year ago.
The Global Commercial Services division of the company reported fourth quarter net income of $580m, up 52% from $382m a year ago. Total revenues net of interest expense stood at $2.7bn, an increase of 7% from $2.5bn a year earlier.
Commenting on the performance, American Express chairman and CEO Kenneth Chenault said: “The upfront charge triggered by the Tax Act reduced our capital ratios and, as a result, while we will be continuing our quarterly dividends at the current level, we plan to suspend our share buyback programme for the first half of 2018 in order to rebuild our capital.
“Overall, we believe the Tax Act will be a positive development for both the US economy and American Express. Given the momentum in the business and the anticipated benefit of a lower tax rate, we now expect to invest up to $200m more in 2018 than we originally planned for customer-facing growth initiatives.”