AMEX Profits Drop

CardLine reports that the decline in travel expenditures and business spending in the fourth quarter of 2001 caused a sharp drop in the earnings of Travel-Related Services (TRS) of American Express. Earnings for the unit declined to $170 million from $470 million in the same quarter of the previous year—a drop of 64 percent. Over the same period, spending on the card dropped to $74.4 billion from $79 billion, a decline of six percent. Higher expenditures on retail purchases were almost offset by lower outlays on corporate travel and entertainment. The bottom line: net revenues of TRS for 2001 declined from $1.9 billion in 2001 to $1.46 billion, down 24 percent.