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Two Ways To Play: Amex Card Members Starting To Leave Home Without It


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Shares of American Express (AXP) are higher in after-hours trading. The credit card company said third-quarter earnings came in at $0.74 per share, $0.15 better than consensus estimates of $0.59 a share. Revenues rose 3% year-over-year to $7.16 billion, versus $7.31 billion consensus.

But in the company's press release, Chairman and CEO Keneth Cheanault had this to say:

We saw clear signs earlier this year of a weakening environment and the recent volatility in the financial markets has reinforced our view that consumer and business sentiment is likely to deteriorate further, translating into weaker economies around the globe well into 2009. Cardmember spending is likely to remain soft. Loan growth will be restrained, in part because of the steps we are taking to reduce credit risks, and credit indicators are likely to reflect the continued downturn in the economy and throughout the housing sector.

Shares were higher by as much as 7% in extended trading.

From the Bull Pen: It's been a very painful month for the energy sector, but there are signs that the forced selling is done. Consider Patterson-UTI (PTEN) . Professsor Krueger mentioned this play on the Buzz today. With nearly a 5% dividend, it's an "interesting cushion to brace against a fall in spending from the E&P companies for this land-based driller."

From the Bear Cave: An amazing beat-the-numbers game for American Express, but how much actual good news was there to report? We could see shares rally another few points to the $30 level, at which time bears might consider reloading for another downside move.

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No positions in stocks mentioned.

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