Discover Financial Services Earnings: Here’s Why the Stock is Up Now

Discover Financial Services (NYSE:DFS) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 2.02%.

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Discover Financial Services Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 12.71% to $1.33 in the quarter versus EPS of $1.18 in the year-earlier quarter.

Revenue: Decreased 9.29% to $1.99 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Discover Financial Services reported adjusted EPS income of $1.33 per share. By that measure, the company beat the mean analyst estimate of $0. It missed the average revenue estimate of $8.14 billion.

Quoting Management: “Discover delivered strong profitability and growth in the first quarter, which combined with our outlook allowed us to increase our dividend by 43%,” said David Nelms, chairman and CEO of Discover. “During the quarter, we had a nationwide rollout of Discover IT, our new flagship credit card, and we made progress in growing our suite of direct banking products by introducing Cashback Checking to some of our customers.”

Key Stats (on next page)…

Revenue decreased 14.43% from $2.33 billion in the previous quarter. EPS increased 24.3% from $1.07 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.1 to a loss $0. For the current year, the average estimate is a loss of $0, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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