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American Express adjusts
September 17, 2001: 6:14 p.m. ET

Company says sales declines, relocation costs will weigh on profits
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NEW YORK (CNNfn) - American Express Co. said the terrorist attacks on New York City and Washington, D.C., which has left its world headquarters uninhabitable for at least several months, will have an unspecified financial impact on the company.

Prior to last Tuesday's attacks, which destroyed New York City's World Trade Center and damaged scores of surrounding buildings, American Express said it had expected to meet the Street's consensus estimates for the current quarter, which stood at a profit of 38 cents per share and $5.6 billion in revenue.

The company said Monday that it now expects its results to be below those levels, although it did not say how much. The recent terrorist attacks have already created, and are likely to continue to generate, additional economic and market weakness throughout the travel, payment services and financial services industries," American Express said in a statement.

American Express also said it expects business in the next quarter to be lower as well, citing: last week's shutdown of air travel in the United States and the likelihood of reduced corporate and consumer travel volumes for the near term; reduced spending levels in reaction to the events and their potential impact on global economic activity; lower financial product sales volumes and assets under management due to the temporary halt in securities trading and weakness in the financial markets; and costs related to leasing alternative headquarters facilities and relocating and equipping up to 5,000 employees.

Aside from the unanticipated drop in business volumes, American Express (AXP: Research, Estimates) said its operations will not otherwise be disrupted following the attack on the World Trade Center.

Last Tuesday morning, two hijacked commercial airliners crashed into each of the trade center's twin 110-story towers, taking the lives of all on board the planes as well as thousands inside and around the World Trade Center complex. The attack caused the towers and some adjacent buildings to collapse, and caused the closing of scores of other nearby buildings as well. The latter included those in the World Financial Center, where American Express has its headquarters.

Notwithstanding its inability to use its headquarters building and office space in the World Trade Center complex, American Express said its business operations and customer service activities continue to function normally around the world.

"The company is implementing previously designed business continuity plans and is in the process of relocating its employees based at the World Financial Center to other locations in the New York City metropolitan area," American Express said. graphic