Discover Financial Beats on Both Top and Bottom Lines
Discover Financial Services (NYSE: DFS) reported fiscal third quarter earnings per share (EPS) of $1.21 on revenue of $1.96 billion. In the same period a year ago, the credit card issuer and payments network operator reported adjusted EPS of $1.18 on revenue of $1.79 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $1.04 and $1.90 billion in revenue.
Total loans grew 9% from the prior year to $59.2 billion, while credit card loans grew 4% to $48.1 billion. Credit card loan delinquencies and net charge-offs reached historic lows.
The company's chairman and CEO said:
Card sales and receivables grew in a challenging environment while credit quality continued to improve. We successfully launched Discover Home Loans in June, which expanded our direct banking product suite. In payments, we signed agreements with PayPal, Industrial and Commercial Bank of China, and most recently Russian Standard Bank to enhance our global presence and leverage our existing infrastructure.
Earlier this week, Discover agreed to refund $200 million to more than 3.5 million customers and pay a $14 million fine to settle charges by brought by the Federal Deposit Insurance Corp. and by the new Consumer Financial Protection Bureau that Discover engaged in deceptive sales practices.
Discover's shares are up 3.6% in premarket trading to $38.35. The prior 52-week range is $21.44 to $39.64. Thomson Reuters had a consensus analyst price target of $41.16 before today's report.
Filed under: 24/7 Wall St. Wire, Earnings, Financial Stocks Tagged: DFS, featured