Discover’s Q2 Profit Falls as Loan Loss Provisions Rise 32% (DFS)

Share |

Credit card issuer Discover Financial Services ( DFS ) on Tuesday posted second quarter earnings that met Wall Street's expectations, but in a reversal of recent trends, its money set aside to cover bad loans rose significantly from last year.

The Riverwoods, IL-based company reported second quarter net income of $532 million, or $1 per share, compared with $593 million, or $1.09 per share, in the year-ago period.

Revenue net of interest expense rose 6% from last year to $1.85 billion.

On average, Wall Street analysts expected a matching profit of $1 per share, on slightly lower revenue of $1.84 billion.

On a sour note, DFS said that provision for loan losses rose 32% from last year to $232 million. Loan loss provisions are funds set aside to cover loans a company doesn't expect to be repaid.

Discover Financial shares fell 75 cents, or -2.3%, in premarket trading Tuesday.

The Bottom Line
Shares of Discover Financial Services ( DFS ) have a 1.22% dividend yield, based on last night's closing stock price of $32.83. The stock has technical support in the $28-$30 price area. If the stock can firm up, we see overhead resistance around the all-time high levels of $34-$35 a share.

Discover Financial Services ( DFS ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Created by

This article appears in: Investing , Stocks

Referenced Stocks: DFS

More from

Related Videos




Most Active by Volume

  • $10.50 ▲ 3.04%
  • $29.22 ▲ 4.62%
  • $16.36 ▼ 0.49%
  • $113.29 ▲ 0.33%
  • $2.39 ▲ 4.82%
  • $5.78 ▲ 0.87%
  • $105.62 ▼ 0.02%
  • $28.42 ▲ 2.53%
As of 8/28/2015, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by