Shares in American Express Co. dipped Thursday after it said it would probably take a charge in the fourth quarter.
Kenneth Chenault, the New York company's chief executive, said during a semiannual conference for analysts Wednesday that it is cutting jobs and trimming some expenses but that it does not expect to realize savings until the first quarter of 2009. He said it did not yet know how many positions would be eliminated or the magnitude of any expense reductions.
"Rising fuel prices, rising unemployment, record-low consumer confidence, and most critically, housing declines have made this economic cycle unlike any other," Mr. Chenault said.
American Express shares have dropped by more than a third in the past year as consumers struggle to repay debt of all types. Late and unpaid loans were worse than expected in the second quarter and will rise this year, Mr. Chenault said last month.
Even the lender's wealthier cardholders have been affected by the slowing U.S. economy, he said.
Amex shares dropped 4% Thursday to $36.40.
In a research note published Thursday, Sanjay Sakhrani, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., wrote that Amex will continue to face the risk of slowing consumer spending and the potential of cuts in interchange fees resulting from regulatory changes.
He maintained his "market perform" rating.
