NEW YORK – Earnings American Express Co. (Amex) reportedly dropped 22 percent. The decline in income from credit card companies is due to low increased credit losses.

As quoted by the Associated Press (AP), Friday (23/10/2009), investors were looking at this report with caution, because it can make the stock price fell 34 cents to $ 36, 10. Amex own stock has risen $ 1, 34 or equivalent and 3.8 percent in the position of $ 36, 44.

In the credit card business in the U.S., the AmEx not disclose the percentage of the loan may be raised to 8.9 percent from 5.9 percent in the previous year. However, the loss rate slowed from 10 percent in the second quarter. Almost all lenders look at a lot of customers who shuffle their bills to pay, because the economy is stagnating as economic turmoil and rising unemployment.

The amount charged to the AmEx card is declined, although the increase from the second quarter. Cardholder spending fell 11 percent to USD156, 6 billion, slightly better 13 percent seen in the previous quarter. In the U.S., the average cardholder spending fell five percent to USD2.898. After adjusting for foreign exchange, decreased spending only three percent.

AmEx Chief Financial Officer Daniel Henry said he believed the current decline in spending has been stable. But, when economic progress, he warned that business growth will likely slow down the card, and consumers remain cautious on their spending.

“We need to be careful about the impact of the unemployment rate higher. It’s too early to say that all the economic challenges are behind us,” said Henry.

For the period ended 30 September, AmEx earnings after paying dividends, preferred stock, and accounting for the other items reached USD632 million, or 53 U.S. cents per share. This figure is down from USD810 million or equivalent to 70 U.S. cents per share in the previous year.

While the total loans under management of American Express, both credit and securitized loans, fell 20 percent to $ 60, 7 billion. Total revenue fell 17 percent to $ 4, 84 billion, less than the average analyst estimate of $ 5, 92 billion.

In addition, due to the bad loans at the AmEx, the company has set aside $ 1, 18 billion, this figure is 13 percent less than USD1, 36 billion last year compared to the period of 26 percent, smaller than the second quarter of $ 1, 58 billion. As for weight, down 17 percent from the third quarter last year to $ 3, 92 billion.