Discover 3Q Net Down 74% On 2009 Gain; Profit Top Views

Date : 09/20/2010 @ 9:31AM
Source : Dow Jones News
Stock : Student Loan Corp. (The) (STU)
Quote : 32.44  0.0 (0.00%) @ 2:05AM

Discover 3Q Net Down 74% On 2009 Gain; Profit Top Views

Department 56 (NYSE:DFS)
Historical Stock Chart

5 Years : From Oct 2012 to Oct 2017

Click Here for more Department 56 Charts.

Discover Financial Services' (DFS) fiscal third-quarter profit dropped 74% following a year-earlier legal gain, but earnings handily topped analysts' expectations as loan problems eased notably from the spring.

Shares were up 3.5% in recent premarket trading

Discover, both a lender to cardholders and a processor of transactions, continued to benefit from falling delinquencies and lower loan-loss provisions. Card-sales volume rose for the fourth-straight quarter. Meanwhile, the industry faces increased consumer protective measures, including rules cutting late-payment fees that could cut issuers' revenue by billions annually.

Friday, the company agreed to acquire private student-loan operations of Student Loan Corp. (STU) for $600 million and $4.2 billion of the company's assets for 91.5 cents on the dollar. The company has been ramping up its business in personal and private student loans, seeking revenue growth.

For the quarter ended Aug. 31, Discover posted a profit of $260.6 million, or 47 cents a share, down from $577.5 million, or $1.07 a share, a year earlier, which included an 82-cent gain from its antitrust deal with Visa Inc. (V) and MasterCard Inc. (MA).

Analysts polled by Thomson Reuters most recently predicted earnings of 38 cents for the latest quarter.

Discover's card business saw profit jump 81% as card-sales volume rose 5%. Net charge-offs, or loans the company doesn't expect to collect, dropped to a better-than-expected 7.18% from 8.4% a year earlier and 7.97% in the prior quarter. Delinquencies of 30 days or more were 4.16%, down from 5.11% a year earlier and 4.52% in the second quarter.

Provision for loan losses dropped on an adjusted basis to $712.6 million from $1.09 billion and $724.3 million, respectively.

Last month, fellow lender-and-processor American Express Co. (AXP) said its latest-quarter earnings nearly tripled as customers increased spending by 16%.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;


Latest STU Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....

No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts

Your Recent History
Gulf Keyst..
FTSE 100
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.