American Express Profit Falls 10%

American Express, the credit card and travel services company, said on Monday that fourth-quarter profit fell 10 percent, hurt by a charge to bolster reserves for bad loans.

Net income for the company declined to 1 million, or 71 cents a share, compared with 2 million, or 75 cents, in the period a year earlier.

Profit from continuing operations was 71 cents a share. That matched the average forecast by analysts, according to Reuters Estimates.

Net revenue rose 10 percent, to .36 billion. Analysts on average expected revenue of .78 billion.

The company released its results after markets closed. Shares of American Express fell 2.9 percent in after-hours electronic trading, dropping .39, to .01. They had ended regular trading up .96, or 4.3 percent, at .40 on the New York Stock Exchange.

Results included a 8 million charge, or 4 million after taxes, to increase loss reserves as consumer credit quality, especially in California and Florida, showed signs of weakness.

American Express had announced plans for a charge on Jan. 10, worrying investors who had thought its wealthier cardholders might be less likely to experience financial pressure as the economy slowed. Lower consumer spending could result in lower card fees.

“We are not immune from further deterioration in the economic and credit environment,” the chief executive, Kenneth I. Chenault, said in a statement. “We believe our focus on the premium sector should help us to weather the current conditions better than many competitors.”

Mr. Chenault said his outlook for 2008 remained “cautious,” with slower earnings growth. For all of 2007, profit rose 8 percent, to .01 billion.

On Jan. 23, Capital One Financial, another large card issuer, said fourth-quarter profit fell 42 percent.