NEW YORK - Discover Financial Services (NYSE:DFS) reported fourth-quarter earnings that significantly exceeded analyst expectations, driving its stock up 2.5% in after-hours trading Wednesday.
The credit card issuer and financial services company posted adjusted earnings per share of $5.11, handily beating the consensus estimate of $3.20. Revenue came in at $4.76 billion, also surpassing analysts' projections of $4.41 billion.
Discover's net income surged 253% YoY to $1.29 billion, compared to $366 million in the same quarter last year. The company benefited from a lower provision for credit losses and increased revenue, partially offset by higher operating expenses.
"Discover's fourth quarter results capped off a successful 2024 as loan growth, margin expansion, and credit improvement led to strong financial performance," said Michael Shepherd, Discover's Interim CEO and President.
Total (EPA:TTEF) loans ended the quarter at $121.1 billion, down 6% YoY. Credit card loans, which make up the bulk of Discover's portfolio, rose 1% to $102.8 billion.
The company's net interest margin expanded to 11.96%, up 98 basis points from the prior year, benefiting from the sale of its student loan portfolio. The total net charge-off rate increased to 4.64%, up 53 basis points YoY but down 22 basis points sequentially.
Discover's board declared a quarterly cash dividend of $0.70 per share of common stock, payable on March 6, 2025.
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