Synchrony Posts Solid Earnings Beat

By Chris Lange Updated Jan 13, 2:43PM EST · Published Jan 22, 8:40AM EST

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Synchrony Posts Solid Earnings Beat — © Thinkstock

Synchrony Financial (NYSE: SYF) reported its fourth-quarter financial results before the markets opened on Friday. The company had $0.65 in earnings per share (EPS) on $3.21 billion in revenue for the three months that ended in December. That compared to consensus estimates from Thomson Reuters of $0.63 in EPS on revenue of $3.2 billion. In the same period of the previous year, the company posted EPS of $0.64 and $2.98 billion in revenue.

During this quarter, total platform revenue increased 5%, compared to the fourth quarter of the previous year. At the same time, loan receivables grew by 11%, or $7 billion, to $68 million. There was strong deposit growth as well, with an increase of 24%, or $6 billion, to a total of $43 billion.

The estimated Common Equity Tier 1 ratio under Basel III subject to transition provisions was 16.8%, and the estimated fully phased-in Common Equity Tier 1 ratio under Basel III was 15.9%. Return on assets was 2.6% and return on equity was 17.5%.

Margaret Keane, president and CEO of Synchrony Financial, commented on earnings:

The fourth quarter marked a successful conclusion to a historic year for Synchrony Financial. We maintained strong momentum across each of our business platforms and our receivables, deposits, and revenue growth remained solid. We continue to leverage our array of value-added capabilities and vast experience to propel growth, expand our distribution, and attract new business. This past year alone we renewed five key relationships and signed a number of new partners, while expanding our network through new strategic alliances. And we were able to achieve this while executing on our separation from GE. We aim to continue to build on this momentum in 2016 and are excited about our future growth prospects and opportunities as a stand-alone company.

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On the books, the company has cash and cash equivalents totaling $12.33 billion, compared to $11.83 billion in the same period from the previous year.

Shares of Synchrony closed Thursday up 0.4% at $27.73, with a consensus analyst price target of $38.26 and a 52-week trading range of $26.28 to $36.40.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.