Discover Financial Services Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Discover Financial Services (NYSE:DFS) will unveil its latest earnings on Thursday, December 20, 2012. Discover Financial Services is a credit card issuer in the United States and an electronic payment services company.

Discover Financial Services Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.12 per share, a rise of 17.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from $1.01. Between one and three months ago, the average estimate moved up. It has risen from $1.11 during the last month. Analysts are projecting profit to rise by 11.1% versus last year to $4.51.

Past Earnings Performance: Last quarter, the company beat estimates by 18 cents, coming in at profit of $1.21 a share versus the estimate of net income of $1.03 a share. It marked the fourth straight quarter of beating estimates.

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Wall St. Revenue Expectations: Analysts predict a rise of 8.3% in revenue from the year-earlier quarter to $1.96 billion.

Stock Price Performance: Between September 20, 2012 and December 14, 2012, the stock price rose $1.37 (3.6%), from $38.16 to $39.53. The stock price saw one of its best stretches over the last year between January 6, 2012 and January 17, 2012, when shares rose for seven straight days, increasing 11.1% (+$2.70) over that span. It saw one of its worst periods between July 17, 2012 and July 25, 2012 when shares fell for seven straight days, dropping 4.2% (-$1.51) over that span.

A Look Back: In the third quarter, profit fell 3.4% to $626.7 million ($1.21 a share) from $648.8 million ($1.18 a share) the year earlier, but exceeded analyst expectations. Revenue rose 6.4% to $2.29 billion from $2.15 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 9.9% in the fourth quarter of the last fiscal year, 3.8% in the first quarter and 3.4% in the second quarter before increasing again in the third quarter.

The company is trying to use this earnings announcement to rebound from income declines in the past two quarters. Net income dropped 10.6% in the second quarter and then again in the third quarter.

Analyst Ratings: There are 13 out of 18 analysts surveyed (72.2%) rating Discover Financial Services a buy.

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