Bloomberg News

Discover Financial Services (DFS - Get Report) slipped 0.8% to $66.73 by the close of trading on Friday after the financial services company missed fourth-quarter earnings expectations.

The Riverwoods, Illinois-based credit card issuer and lender reported net income of $687 million, or $2.03 a share, up from $387 million, or 99 cents, a year ago, but missed Wall Street's expectations of $2.09 a share. 

The company posted revenue of $3.41 billion and adjusted revenue of $2.81 billion, which met analysts' expectations. For the year, the company reported profit of $2.74 billion, or $7.79 a share. Revenue totaled $10.71 billion.

Direct banking pretax income totaled $874 million, up $4 million from a year ago, the company said, driven by higher net interest income, largely offset by an increase in the provision for loan losses and higher operating expenses.

Total loans ended the quarter at $90.5 billion, up 7% from the prior year. Credit card loans ended the quarter at $72.9 billion, up 8% from the prior year.

Discover said personal loans increased $80 million, or 1%, from the prior year. Private student loans increased $205 million, or 2%, year over year, and grew $652 million, or 9%, excluding purchased student loans. Net interest income increased $181 million, or 9%, from the prior year, driven by loan growth and net interest margin expansion.

"Our disciplined focus on delivering profitable growth continued to drive solid operating performance and strong returns in the fourth quarter," Roger Hochschild, CEO and president, said in statement. "For the full year, our results were characterized by robust returns even as credit normalization continued, and our ongoing investments in technology and global merchant acceptance will enhance customer experience, scale, and overall performance."