Discover Financial Beats on Both Top and Bottom Lines

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By Trey Thoelcke Published
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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.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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