Join        Login             Stock Quote

Discover Financial Services (DFS) 4Q Earnings Rise 7.4 Pct, Yet Miss Estimates

 December 20, 2012 10:14 AM

(By Balaseshan) Discover Financial Services (NYSE: DFS), a direct banking and payment services company, reported a 7.4% increase in quarterly earnings helped by improvements in credit performance, solid organic growth and strong volume growth across its networks.

Earnings for the fourth quarter were $551 million or $1.07 per share, up from $513 million or $0.95 per share last year.

Revenue net of interest expense grew to $1.99 billion from $1.81 billion.

Analysts, on average, polled by Thomson Reuters had expected a profit of $1.13 per share on revenue of $1.97 billion for the fourth quarter.

Discover card sales volume grew 6% to $26.5 billion, primarily driven by an increase in the number of customers using their Discover card. Credit card loans ending the quarter at $49.6 billion, up 6% from last year.

[Related -Using Discover Financial Services (DFS) To Explain How To Get The Most Out Of Trading Earnings Iestimates]

The delinquency rate for credit card loans over 30 days past due rose 53 basis points to 1.86%, while the credit card net charge-off rate declined 95 basis points to 2.29%.

Total loans grew 6% to $61.0 billion. Private student loans increased $426 million, while personal loans increased $624 million.

Net interest margin increased 34 basis points to 9.44%, reflects decreased funding costs partially offset by lower total yield. Credit card yield fell 20 basis points to 12.16%, due to an increase in promotional rate balances and a decline in higher rate balances, partially offset by lower interest charge-offs.

[Related -Buyback Favorites In Finance-Sector]

Revenue from payment services increased $8 million, primarily driven by an increase in point-of-sale transactions on the PULSE network.

Payment Services dollar volume was $49.0 billion for the fourth quarter, up 13% from the prior year, driven by higher PULSE and Network Partners volume.

The company's board declared a quarterly cash dividend of $0.14 per share of common stock, payable on Jan. 17, 2013, to stockholders of record at the close of business on Jan. 3, 2013.

DFS is trading down 2.69% at $38.70 on Thursday. The stock has been trading between $23.75 and $42.08 for the past 52 weeks.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageTackling China's Debt Problem: Can Debt-Equity Conversions Help?

China’s high and rising corporate debt problem and how best to address it has received much attention read on...

article imageWill Job Growth Kill The Bear-Market Signal For Stocks?

It’s all about jobs now. Actually, it’s always been about jobs. But the stakes are even higher—perhaps more read on...

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.