RIVERWOODS, Ill. (AP) - Discover Financial Services on Tuesday reported a modest increase in its third-quarter per-share earnings, and its stock rose in after-hours trading.
RIVERWOODS, Ill. (AP) — Discover Financial Services on Tuesday reported a modest increase in its third-quarter per-share earnings, and its stock rose in after-hours trading.
On a per-share basis, the company said it earned $1.38 per share, up from $1.37 a share a year earlier. The results exceeded Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of $1.34 per share.
But overall net income fell 5 percent to $612 million. Discover's per-share earnings rose because it bought back its own stock.
The credit card issuer and lender posted revenue of $2.19 billion in the period, which also beat Street forecasts but was mostly unchanged from a year earlier. Seven analysts surveyed by Zacks expected $1.84 billion.
Credit card volume on Discover's payment network was $31.4 billion in the quarter, up from $30.58 billion the same period a year earlier.
"While total loan growth slowed slightly due to consumer spending levels, it remained solid. In addition, we achieved the highest level of new card accounts since the recession, which should bode well for the future," said David Nelms, chairman and CEO of Discover, in a statement.
The amount of money Discover had to set aside to cover bad loans fell to $332 million from $354 million a year earlier. Discover's credit card charge-off rate, or the percent of loans it believes to be unrecoverable, fell to 2.04 percent from 2.16 percent a year earlier.
Discover shares rose 68 cents, or 1.2 percent, to $55.40 in after-hours trading. They have fallen 16 percent in 2015, closing at $54.72 Tuesday.
This story was partially generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DFS at http://www.zacks.com/ap/DFS
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