American Express Plans 3,300 Layoffs, Reports 55% Profit Rise

American Express Co. said Monday that it plans to lay off 3,300 workers this year, or about 5% of its employees, in an effort to improve the performance of its travel services unit.

The announcement came as the charge card company reported that profit for the fourth quarter rose 55% from a year earlier.

About two-thirds of the jobs to be eliminated are based overseas and most come from administrative and support positions in the company’s travel-related operations, which include its credit and charge cards, said Michael O’Neill, a company spokesman. Some American Express facilities will be closed in the restructuring, including a number of overseas travel offices.

The New York-based company employs about 70,000 workers.

The company said earnings were reduced by $138 million in accounting for the final three months of last year to pay for the restructuring, about $70 million of that going for worker severance payments.

Despite the charge, the company said it earned $595 million, or $1.23 a share in the fourth quarter, up from $384 million, or 77 cents a share, in the same period a year earlier. The 1996 quarter also includes a $300-million gain on the sale of its interest in First Data Corp.

Wall Street sent American Express stock down 3% on the news. Shares fell $1.625 to close at $59.50 on the New York Stock Exchange.

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General Motors Corp.’s Hughes Electronics unit, whose defense operations are being sold to Raytheon Co., said Monday that fourth-quarter earnings fell 4.6% as strikes at GM plants in the U.S. and Canada cut vehicle production and reduced sales of the unit’s automotive products.

Los Angeles-based Hughes said profit from operations fell to $280.9 million, or 70 cents a share, from $294.4 million, or 74 cents, a year earlier.

Wall Street had been expecting Hughes to earn 69 cents a share, based on the average estimate of analysts.

Net income in the fourth quarter fell to $250.3 million, reflecting a charge of $30.6 million for an accounting adjustment related to GM’s 1985 purchase of Hughes Aircraft.

Hughes Electronics’ growth in revenue came primarily from the rising number of subscribers to its DirecTV satellite television service. The number of DirecTV subscribers almost doubled to 2.3 million in 1996, Hughes said.

At a Glance:

Mobil Corp. and Atlantic Richfield Co. became the latest major oil companies to report higher fourth-quarter earnings because of increases in oil and natural gas prices. Fairfax, Va.-based Mobil, the second-biggest U.S. oil company, said profit from operations rose to a record $879 million, or $2.20 a share, from $760 million, or $1.89, in the fourth quarter of 1995. The results beat analysts’ average estimate of $1.97 a share.

Los Angeles-based Arco’s fourth-quarter profit was $380 million, or $2.32 per share, compared with $348 million, or $2.13 per share, a year earlier. The results were below analysts’ average expectation of $2.57 per share.

Eli Lilly said fourth-quarter earnings rose 20% on strong sales of its best-selling antidepressant Prozac, the diabetes drug Humulin and three new products. The drug maker had net income of $373.0 million, or 68 cents a share, compared with year-earlier profit from continuing operations of $311.3 million, or 57 cents.

Nabisco Holdings Corp. said fourth-quarter earnings rose 30% to $151 million, or 56 cents a share, from $116 million, or 44 cents, in the year-earlier quarter.

Merrill Lynch & Co. said fourth-quarter earnings rose to a record $376 million, or $1.93 a share, from $303 million, or $1.49, during the comparable period a year earlier.

Rhone-Poulenc Rorer Inc. said fourth-quarter earnings rose 21% to $165.4 million, or $1.21 per share, compared with $137.0 million, or $1.02, a year ago.

Corning Inc. said fourth-quarter profit from continuing operations rose 29% to $91.3 million, or 40 cents a share, from $70.3 million, or 31 cents, in the year-earlier period.

HFS Inc. said fourth-quarter earnings more than doubled to $49.7 million, or 35 cents a share, from $20.4 million, or 18 cents, a year earlier.

Tyson Foods Inc. said fiscal first-quarter earnings fell 6.2%, less than expected, to $40.6 million, or 28 cents a share, from $43.3 million, or 30 cents, a year earlier.

Coastal Corp. said its fourth-quarter earnings rose 4.1% to $116 million, or $1.05 a share, compared with $111.4 million, or $1.01, a year ago.

Jenny Craig Inc. reported fiscal second-quarter net income of $532,000, or 3 cents per share, compared with $2.8 million, or 11 cents, in the year-ago quarter.