Discover Financial Services (NYSE:DFS) reported on its latest quarterly earnings results late Wednesday, posting weak profit due to the tax reform.
The Tax Cuts and Jobs Act took a chunk of the company’s fourth-quarter earnings, costing it non-recurring charges of $189 million from actions taken by the company in relation to the Act. All in all, Discover Financial Services’ period was reduced by 52 cents per share in diluted earnings.
The company earned 99 cents per share on an adjusted basis during its fourth quarter, 55 cents worse than Wall Street’s consensus estimate of $1.54 per share. In the year-ago quarter, the company earned $1.40 per diluted share.
Discover Financial Services’ return on equity for the fourth quarter of 2017 was 14%. Its total loans grew by $7 billion — 9% — compared to the year-ago quarter, while credit card loans were $5.8 billion — 9% — higher than a year ago, reaching $67.3 billion.
Consumer deposits were higher by 9%, or $3.4 billion, compared to the year ago, reaching $39.4 billion. Discover’s Payment Services transaction dollar volume was $54 billion, a 17% increase year-over-year.
“As we move forward in 2018, this strong momentum, enhanced by the favorable economic environment, should position us well for sustained growth, strong ROE and continued return of excess capital to shareholders,” said David Nelms, chairman and CEO of Discover. “While the new tax law impacted the current quarter, I am excited about the opportunity it provides to further invest in growth, our people and our communities.”
DFS stock gained a fraction of a percentage after the bell Wednesday.