01—Abstract
Summary
Summary of the 10-K filed February 26, 2010. Cited figures are marked; the original filing is the authoritative source.
In 2009, American Express (AXP) faced a challenging economic environment, reporting a 14% decrease in total revenues net of interest expense to $24.5 billiona and a 26% decline in income from continuing operations to $2.1 billion.
Diluted earnings per share also saw a significant drop. Despite these headwinds, AXP demonstrated resilience, with spending volumes turning positive in Q4 2009, indicating a potential recovery.
The company continued to execute its "spend-centric" business model, leveraging its strong brand and closed-loop network as competitive advantages. Strategic organizational changes were implemented in late 2009 to focus on growth opportunities and streamline operations, including the creation of an Enterprise Growth Group and a Global Services Group aimed at cost savings and improved efficiency.
02—Key points
Key Highlights
- Total revenues net of interest expense decreased by 14% to $24.5 billion in 2009 compared to 2008.
- Income from continuing operations decreased by 26% to $2.1 billion in 2009.
- Diluted earnings per share (EPS) based on income from continuing operations fell to $1.54 in 2009, down from $2.47 in 2008.
- Return on average equity decreased to 14.6% in 2009 from 22.3% in 2008.
- Cardmember spending volumes turned positive in the fourth quarter of 2009, a positive sign after a challenging year.
- AXP implemented organizational changes in October 2009, including the formation of an Enterprise Growth Group and a Global Services Group to drive new revenue streams and cost efficiencies.
- The company emphasized its "spend-centric" business model and strong brand as key competitive advantages.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 26, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $24.52B$28.36B | −13.5% |
| Operating Income | $2.84B$3.58B | −20.7% |
| Interest Expense | $2.21B$3.56B | −37.9% |
| Net Income | $2.13B$2.70B | −21.1% |
| EPS (Basic) | $1.54$2.33 | −33.9% |
| EPS (Diluted) | $1.54$2.32 | −33.6% |
| Shares Outstanding (Basic) | 1.17B1.15B | +1.2% |
| Shares Outstanding (Diluted) | 1.17B1.16B | +1.3% |
05—Questions
Frequently Asked Questions
How did American Express perform financially in 2009?
In 2009, American Express experienced a decline in financial performance due to the challenging economic environment. Total revenues net of interest expense decreased by 14% to $24.5 billion, and income from continuing operations fell by 26% to $2.1 billion. Diluted earnings per share also decreased significantly.
What were the key factors affecting AXP's performance in 2009?
The primary factors impacting AXP's performance were the weak global economy, frozen credit markets in the first half of the year, and high industry-wide credit losses. These conditions led to declines in cardmember spending and increased credit write-offs.
What is American Express's strategic outlook and what organizational changes were made?
American Express remains focused on its "spend-centric" business model, leveraging its brand and closed-loop network. In late 2009, the company restructured by creating an Enterprise Growth Group to explore new revenue opportunities and a Global Services Group to streamline operations and achieve cost savings, aiming for $500 million in gross expense savings by 2012.
What are the main business segments of American Express?
American Express operates through four reportable segments: U.S. Card Services, International Card Services, Global Commercial Services, and Global Network & Merchant Services.
06—Continue