NEW YORK (TheStreet) -- Discover Financial Services (DFS) reported third-quarter earnings of $1.20 on revenue of $2.06 billion, just shy of Thomson Reuters-recorded expectations of $1.21 a share on $2.07 billion in revenue. In the year-ago quarter, the direct banker and payment services operator posted earnings of $1.24 a share.
Total loans saw a 5% quarterly improvement to $62.7 billion. Credit card loans accounted for $50.4 billion of the total, up 4% on the year-ago quarter.
"Discover's card loan growth continues to exceed industry growth while charge-offs achieved new record lows," said Chairman and CEO David Nelms.
However, an increased provision for loan losses of $333 million dragged on profitability. Discover increased its reserves by $197 million over the year-ago quarter, mainly on lower expectations certain debts would be recovered.In extended trading, shares shed 1.9% to $52.73, contributing to the 0.39% loss realized throughout Monday. TheStreet Ratings team rates Discover Financial Services INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate Discover Financial Services (DFS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
- You can view the full analysis from the report here: DFS Ratings Report
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV