American Express Co.'s fourth-quarter net income fell 79% from the third quarter and a year earlier, to $172 million, as the company took charges for job cuts and the extension of a reward program.

The chargeoff rate in the New York company's U.S. credit card business increased 80 basis points from the third quarter and 330 from a year earlier, to 6.7%. Amex's provision for credit losses increased 3% from the third quarter and fell 3% from a year earlier, to $1.4 billion.

Kenneth Chenault, Amex's chief executive, said in a press release that it remains "cautious about the economic outlook through 2009."

Cardholder spending will "remain soft with past-due loans and writeoffs rising from current levels," Mr. Chenault said. "However, we believe the longer-term growth potential of the payments sector remains very attractive."

The results included $273 million of after-tax charges, primarily related to previously announced job cuts, and a $66 million addition to reserves for reward liabilities related to the extension of the program with Delta Air Lines Inc. These items were partly offset by the after-tax recognition of $136 million from settlements of antitrust lawsuits against Visa Inc. and MasterCard Inc.

The results for the fourth quarter of 2007 included a significant boost to reserves because of a sharp deterioration in credit trends, a $430 million after-tax charge related to a change in the way Amex estimates reward liability, and a $700 million after-tax gain from the Visa settlement.

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