Discover Financial Services (NYSE: DFS) reported fourth-quarter fiscal 2012 results before markets opened this morning. The financial services company posted diluted earnings per share (EPS) of $1.07 on revenues of $2 billion, net of interest expense. In the same period a year ago, Discover reported EPS of $0.95 on revenue of $1.96 billion. Today’s results also compare to the Thomson Reuters consensus estimates for EPS of $1.13 and $1.97 billion in revenue.

The company’s CEO said:

In 2012, we established new partnerships in payments, diversified our direct banking product offerings and demonstrated our commitment to returning excess capital, which we are further emphasizing with a 40% increase in our dividend.

Volume on credit card sales grew 6% year-over-year and net interest margin rose 34 basis points to 9.44%. The delinquency rate for bills more than 30 days past due fell to 1.86% and the net charge-off rate fell to 2.29%, down 95 basis points from a year ago and down 14 basis points sequentially.

Discover did not provide guidance, but the consensus estimates for the first quarter of 2013 call for EPS of $1.11 on revenues of $1.98 billion. For the full fiscal year ending next November, EPS is forecast at $4.35 on revenues of $8.02 billion.

Shares are down 4% in early trading this morning, at $38.15 in a 52-week range of $23.75 to $42.08. Thomson Reuters had a consensus analyst price target of around $45.75 before today’s results were announced.

Paul Ausick

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