More Consumers Charge It: Discover Earnings Beat Expectations
Sep 20th 2010 7:30PM
Updated Sep 21st 2010 6:57AM
Discover Financial Services's (DFS) fiscal third-quarter profit fell less than analysts expected after sales from its eponymous credit card increased 5% from a year earlier, the company reported Monday.
Net income for the quarter, which ended Aug. 31, fell to $258.2 million, or 47 cents a share, from $552.9 million, or $1.07 a share, for the same period a year earlier. Revenue fell 7%, from the year-ago quarter, to $1.71 billion.
The decrease comes as no surprise considering that last year's third-quarter income included a $287 million boost from an antitrust-lawsuit settlement with Visa (V) and Mastercard (MA). Analysts had expected the company to earn 35 cents per share on $1.67 billion in revenue, according to a Thomson Reuters survey.
Discover benefited from falling interest rates, which helped spur more spending on Discover credit cards, as well as a growing number of merchants who have begun accepting them as a method of payment, the company said in its statement Monday.
"The very positive credit trends that began to manifest themselves earlier this year continued to benefit our results this quarter," Discover CEO David Nelms said in the announcement.