UPDATE 4-Costco to ditch AmEx cards at U.S. stores next year

Thu Feb 12, 2015 2:01pm EST
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* Termination to hurt AmEx earnings for next two years - CEO

* Costco U.S. accounts for 8 pct of spending on AmEx cards

* Agreement to end on March 31, 2016

* AmEx shares fall as much as 7 pct (Adds details, loss market capitalization and stock movement)

By Avik Das

Feb 12 (Reuters) - Warehouse club retailer Costco Wholesale Corp will stop accepting American Express Co's credit cards at U.S. stores from next year, threatening nearly 8 percent of the worldwide annual spending on its cards.

AmEx said on Thursday the loss of the contract would hurt earnings for the next two years, sending its shares down as much as 7 percent and wiping out about $6 billion of market value.

JPMorgan Securities analyst Tien-tsin Huang said the loss of Costco would reduce spending on AmEx cards by about $80 billion a year, including their use at businesses other than Costco's 468 stores in the United States and Puerto Rico.

AmEx said it expected earnings per share growth in 2015 to be flat to down modestly from 2014 as the company invests aggressively to prepare for the termination of the contract.   Continued...