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Thursday 20 July 2017 BUSINESS
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United Airlines shares tumble on disappointing 3Q outlook

By DAVID KOENIG through June. Rival Delta other largest U.S. airlines from April in which a pas- test technology that lets
AP Airlines Writer Air Lines gave a much more dropped by 1 percent or senger was dragged off an the airline offer custom-
DALLAS (AP) — Shares of bullish prediction last week. less. The revenue forecast, overbooked flight. The pub- ers on full flights a travel
United Airlines’ parent tum- On a conference call combined with plans for licity led United to make voucher to give up their
bled Wednesday on the Wednesday, United execu- more growth in the third changes, including raising seat, which United would
company’s weak forecast tives blamed other factors quarter, put a damper on the amounts that employ- try to resell at a higher
about revenue trends for including rising competi- United’s report after the ees can offer passengers to price. In the test, United will
the rest of the summer. tion in key markets such as market closed Tuesday give up their seats. send out offers several days
United said that a revenue China. that second-quarter profit CEO Oscar Munoz said the before the flight rather than
measure that often mirrors United Continental Hold- rose to $818 million, beating changes have reduced waiting until passengers are
average fares would be ings Inc. shares fell $4.66, Wall Street expectations. bumping passengers by 85 at the gate or even — as in
flat in the third quarter after or 5.9 percent, to close at It was United’s first report percent. the April incident — seated
rising 2.1 percent from April $74.24. Shares of the four since the widely seen video Executives said United will on the plane.q

American Express 2Q profit falls 33 percent, due to Costco

By KEN SWEET U.S. and globally. The aver-
AP Business Writer age amount spent on an
NEW YORK (AP) — Credit AmEx card grew, and more
card company American customers were keeping a
Express said its second- revolving balance on their
quarter profit fell 33 per- cards. AmEx makes most of
cent, largely due to the its money by taking a small
fact that it had a significant percentage of each trans-
one-time gain last year action that runs on its net-
tied to the winding down work, so the more money
of its business relationship that is spent on its cards,
with Costco. The New York- the more revenue AmEx
based company earned earns. Historically, most
$1.31 billion in three-month AmEx cards have needed
period ending June 30, or to paid in full at the end
$1.47 a share, compared of each billing cycle, but
with a profit of $1.98 billion, the company recently has
or $2.10 a share, a year ear- been encouraging cus-
lier. The results beat the ex- tomers to keep a balance,
pectations of analysts who even among its traditional
according to FactSet were green, Gold and Platinum
looking for AmEx to earn Card members. This allows
$1.43 a share. American Ex- This photo shows a sign for American Express outside a New York business. American Express Co. AmEx to earn interest on
press’ results for the quarter reported financial results, Wednesday, July 19, 2017. those balances; along with
were distorted by the fact (AP Photo/Mark Lennihan) the fees it collects from
that in the second quar- year ago, due to the tax of the Costco portfolio. transfer of the Costco port- merchants to accept the
ter of 2016, the company treatment and restructur- Looking past the effect of folio. “We’ve been focused cards. “It gives us a unique
ended its relationship with ing charges AmEx had to the end of the Costco re- on emerging from the tran- opportunity — people we
Costco. The results last year book when the Citi deal lationship, AmEx is showing sition with a stronger, more know really well, our exist-
include a one-time gain of closed. signs of recovering from los- diversified mix of business- ing customers — and try to
$1.1 billion from AmEx sell- AmEx’s U.S. consumer card ing a significant part of its es,” AmEx Chairman and get more of their borrowing
ing the Costco credit card business reported a profit business. This is also the last CEO Kenneth Chenault behavior,” Jeffrey Camp-
portfolio to Citigroup. The of $440 million, down 59 quarter that will contain all said in a statement. bell, the company’s chief
company’s expenses rose percent from a year ago, the adjustments AmEx has The number of cards AmEx financial officer, said during
sharply compared to a again because of the sale had to do following the has issued grew both in the a call with analysts.q

CSX execs defend early progress in restructuring railroad

By JOSH FUNK improvement so far. the model a railroad uses is The railroad will also consol- track to achieve a forecast
AP Business Writer “I thought we had a hell difficult because everyone idate all of its dispatching 25 percent improvement
OMAHA, Neb. (AP) — CSX’s of a quarter,” Harrison said who works there is used to into one central location in earnings per share this
new chief executive is de- Wednesday. operating a certain way. instead of the current nine year. Analysts surveyed by
fending the restructuring The Jacksonville, Florida- Harrison said the level of early next year. FactSet had been predict-
progress made in the first based railroad has taken resistance is about what he But Wall Street appeared ing adjusted annual earn-
four months since he was nearly 900 locomotives expected. CSX is working disappointed with CSX’s ings per share this year of
hired to lead a turnaround and 60,000 freight cars to eliminate infrastructure guidance for the rest of $2.29. The 72-year-old Har-
of the railroad. out of service and laid off it doesn’t need and con- the year, and the railroad’s rison was hired by CSX in
CEO Hunter Harrison, who’s 2,300 people this year. Har- solidate operations. That in- shares fell 5.1 percent, or March after pressure from
previously led turnarounds rison said those changes cludes shutting down most $2.77, to close at $51.87 the Mantle Ridge hedge
at three other railroads, haven’t all paid off yet. of the railroad’s 12 railyards Wednesday. fund that owns 5 percent
says he’s pleased with the Changing the operating to eliminate redundancy. CSX reiterated that it’s on of the railroad. q