by Alyssa Oursler | June 19, 2012 11:24 am
A second-quarter earnings report for Discover Financial Services (NYSE:DFS) out Tuesday morning showed a drop in the company’s net income from $600 million to $537 million, or $1 per diluted share, though the figure still exceeded analyst expectations of 95 cents per share.
DFS shares dropped immediately after the bell, but had rebounded to a roughly 1% gain by midday.
Year-over-year revenue was strong, up 6% to $1.8 billion, but was offset by a reserve release of $110 million — the result of a 23-basis-point decline in the reserve rate from the first quarter.
Discover card sales volume jumped 5%, credit card loans were up 4% and total loans, including private student loans and personal loans, increased 9% from the same time last year — a growth of $4.5 billion.
Credit card loan delinquencies and net charge-offs also reached historic lows, at rates of 1.91% and 2.79%, respectively.
Overall, the payment services segment did well, increasing pretax income up $4 million, or 10%, from last year, but pretax income in the direct banking segment was down $63 million from $883 million.
Discover recently has added mortgages, fixed-private-rate student loans and its first major affinity credit card to its offerings.
Source URL: http://investorplace.com/2012/06/discover-q2-earnings-fall-but-beat-estimates/
Short URL: http://invstplc.com/1fDGm4e
Copyright ©2016 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.