The Riverwoods, IL-based credit card company posted earnings of $1.56 per diluted share, surpassing analysts' estimates of $1.47 per share. Revenue for the period was $2.30 billion, above analysts' projections of $2.27 billion.
Total loans rose 5% to $73.6 billion year-over-year, while credit card loans increased 4% to $58 billion from last year. Discover card sales volume was up 1% from a year ago.
"We achieved strong earnings per share growth, despite adding to loan loss reserves, through a combination of profitable loan growth, effective capital deployment and some tax favorability," CEO David Nelms said in a statement.
"Higher loan growth was assisted by record personal loan originations, and occurred despite challenging sales volume growth during the quarter," he added.
Shares of Discover closed lower on heavy trading volume today. About 3.35 million of the company's shares changed hands today vs. its average volume of 2.82 million shares per day.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, good cash flow from operations and increase in net income.
The team believes its strengths outweigh the fact that the company has had generally high debt management risk by most measures that were evaluated.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: DFS