Shares of financial and credit-card company Discover Financial Services (NYSE:DFS) got a jolt Thursday after the company reported Street-beating third-quarter earnings.
Discover’s net income actually slid 3% year-over-year, from $649 million ($1.18 per share) a year ago to $627 million ($1.21 per share). However, that figure still was about 17% better than analyst expectations of $1.03 per share.
Revenues of $1.96 billion were up 10% from the year-ago period and beat Street estimates for $1.9 billion.
Discover was boosted by total loan growth of 9% to $59.2 billion, which included 4% credit card loan growth on a 4% increase in card sales volume. Meanwhile, DFS’ credit card loan delinquency rate of 1.81% and a net charge-off rate of 2.43% both represented all-time lows.
Weighing the company down were lower loan-loss reserve releases, legal expenses related to a case against Discover involving charges of deceptive marketing and other costs related to acquisitions and growth.
Discover was up about 4% in early Thursday trading. Although DFS has made one of the financial sector’s best runs year-to-date, up 55% since Jan. 1, the stock had struggled the past few days, shedding roughly 4% since Monday.
— Kyle Woodley, InvestorPlace Assistant Editor