NU Online News Service, July 23, 11:03 a.m. – American Express Company, New York, is reporting $683 million in net income for the second quarter on $5.9 billion in revenue, up from $178 million in net income on $5.3 billion in revenue for the second quarter of 2001.
Some of the improvement in net income is the result of a $537 million charge the company took in the comparable quarter in 2001 to recognize losses on low-rated bonds held by its American Express Financial Advisors unit.
American Express sells life insurance and other financial services through AEFA, along with charge-card services and travel services.
AEFA is reporting $145 million in net income for the latest quarter on $893 million in revenue. The net income figures include $71 million in losses on bonds issued by WorldCom Inc., Clinton, Miss.
But the picture is far brighter than in the second quarter of 2001, when the unit reported a $307 million net loss on only $162 million in revenue because of the $537 million junk bond charge.
AEFA financial-services sales and sales commissions were up in the latest quarter, but assets and asset-management fees were down because of the weakness of the stock market, American Express says.