AXP had been on bearish track since couple of months amid 40% plunge over its shares. The 2015-Net income in this regard will be lower than previous year’s estimates, upon what expectation for bearish digits is quite possible this year as well.
An article published on The Columbian by Malcolm Berko raises an important postulate that needs to be in discourse. In a direct communication go by Mr. Berko, one of the queries led forth are: Why did American Express lose its Costco account? So well, the reason behind could be a terribly malodourous and second-rated customer service. It’s a matter of concern for AXP when it faces results fluctuations – caused by unfavorable exchange rates, higher operating expenses and growing labor costs. And that too had affected AXP’s management at worst stake; approx. 6% of its employees have been dismissed alongside cutting many of its customer service employees. What’s more frustrating than waiting on a longer ‘hold on’ recorded call instead of directly reaching customer assistance officer? Surely, it’s no bleeding way to run a credit card business. COST shoppers expect better service!
[As what press releases have come about: AXP is TRADING at a reasonable 10 times earnings. It may be a lifetime before AXP returns to the US$ 90s, and the meager 2.2% dividend is off-putting. There’s little compelling reason to own it; there better opportunities to avail and the US$ 17,000 in selling proceeds can find a better base.]
Hence, what P.T., from Columbus has to write for AXP:
“We have 300 shares of American Express that we bought at US$ 64 in year 2013 and it hasn’t done well since. Our broker of 16 years wants us to sell American Express and use half the money to acquire AT&T and the other half to acquire T. Rowe Price Diversified Small Cap Growth. My wife and I are both 57 years and hope to retire at 67 years of age. We’re nervous about the market and the US$ 833,000 that our broker manages for our retirement plan.”
