Earnings Reports for July 24

ByABC News
July 24, 2000, 10:22 AM

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Record Earnings at American Express

Financial servicescompany American Express Co. said second-quarterprofits rose 15 percent to a record, lifted by revenues frommanaging money for investors and increased consumer spending onits cards.

The New York-based company, best known for its signaturegreen charge cards and travelers checks, earned a record $740million, or 54 cents a share, compared with $646 million, or 47cents a share, in the year-ago quarter.

Wall Street analysts on average had expected AmericanExpress to earn 53 cents a share in the quarter.

American Express pulled in fees as customers racked upshopping bills on its charge cards and also bought more mutualfunds from the company. Its new Blue card for onlinepurchases also has been a hit with consumers.

Its profits rose even as higher interest rates putpressure on the credit card industry, pushing some borrowers tothe brink of default and dampening demand for new cards.

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Enron Earnings up 30%

Enron Corp., North Americasbiggest buyer and seller of electricity and natural gas, said second-quarter earnings rose 30 percent and beat WallStreet estimates as Internet-based trading boosted its corewholesale energy business. Net income rose to $289 million, or 34 cents per share, from$222 million, or 27 cents, in the second quarter of 1999.Analysts on average had expected earnings of 32 cents a share,according to First Call/Thomson Financial. Second-quarterrevenues rose 75 percent to $16.9 billion from $9.7 billion.

Customers are increasingly relying on Enron to serve theirenergy needs, as evidenced by an almost 40 percent increase inwholesale energy volumes, Chairman and CEO Ken Lay said in astatement.

EnronOnline, our Web-based transaction system, registereda 92 percent increase in both volumes and transactions comparedto the first quarter, he added.

In addition to its core energy business, Enron has branchedout into broadband telecommunications and recently acquired theLondon-based metals trading house MG Plc.

Analyst Mark Easterbrook of Dain Rauscher Wessels said thefaster-than-expected rise in second quarter earnings was broadlybased, reflecting strong wholesale volume growth, acceleratingprofitability at Enrons energy outsourcing business and smallerthan expected start-up losses for the broadband operations.

Originally a natural gas pipeline operator, Enron haspursued opportunities created by deregulation to become NorthAmericas biggest wholesale gas and electricity marketer. Asenergy markets open up in Europe, it is seeking a leadingposition there, too.

Earlier this month Enron said it would also start postingbuy and sell prices for gas and power on two non-proprietaryonline trading systems, True Quote and HoustonStreet.

Enron Energy Services, an outsourcing business that buyselectricity and gas on behalf of commercial and light industrialcustomers posted its third consecutive quarterly profit.

Enron said its new broadband telecommunications business,which was not trading a year ago, posted a loss of $8 million onrevenues of $151 million. Enron has previously said it expectsthe business to become profitable around 2003.

The company sells bandwidth, or capacity, on its own fiberoptic network and is also pioneering the development ofstandardised tradable contracts to create a more liquid market.

Last week it announced plans to cooperate with BlockbusterInc. to deliver movies on demand to households via digitalsubscriber lines by the end of this year.

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Goodyear Earnings Skid 9%

Goodyear Tire & Rubber Co. reported second-quarter earnings fell 9 percent and were hurt byresistance to price increases, rising raw material costs andcompetition. The nations No. 1 tire manufacturer earned $59.7 million, or 38cents per share, down from $65.7 million, or 41 cents per share, inthe second quarter of 1999.