Discover Financial Earnings: Snaps Strong Streak with Profit Drop

S&P 500 (NYSE:SPY) component Discover Financial Services (NYSE:DFS) reported its results for the second quarter. Discover Financial Services is a credit card issuer in the United States and an electronic payment services company.

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Discover Financial Services Earnings Cheat Sheet

Results: Net income for Discover Financial Services fell to $532 million ($1 per share) vs. $593 million ($1.09 per share) a year earlier. This is a decline of 10.3% from the year-earlier quarter.

Actual vs. Wall St. Expectations: Discover Financial Services beat the mean analyst estimate of 99 cents per share.

Quoting Management: “Our results this quarter reflect outstanding fundamental performance in both of our business segments and continued improvement in credit performance,” said David Nelms, chairman and chief executive officer of Discover. “In addition to the strong financial results for the quarter, I am excited about our recent expansion into three new products. Discover now offers mortgages through the recently acquired Home Loan Center platform, a fixed rate private student loan product to better meet the tuition funding needs of our customers and our first major affinity credit card. We believe these new products lay a foundation for additional revenue and asset growth in the future.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 26 cents in the first quarter, by 4 cents in the fourth quarter of the last fiscal year, and by 27 cents in the third quarter of the last fiscal year.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the third quarter has risen to 99 cents per share from 91 cents. For the fiscal year, the average estimate has moved up from $3.63 a share to $4.09 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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