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Discover’s Q3 Profit and Revenue Beat the Street (DFS)

Credit card issuer Discover Financial Services ( DFS ) on Thursday said its third quarter earnings declined due to growing legal costs, although its profit and revenue totals still beat Wall Street's expectations.

The Riverwoods, IL-based company reported third quarter net income of $627 million, or $1.21 per share, compared with $649 million, or $1.18 per share, in the year-ago period.

Revenue rose nearly 10% from last year to $1.96 billion.

On average, Wall Street analysts expected a much smaller profit of $1.03 per share, on lower revenue of $1.9 billion.

On a sour note, DFS said its loan loss provisions rose 26% from the same period last year, to $126 million. However, provisions were down significantly on a sequential basis from the second quarter, when the funds set aside to cover bad loans totaled $232 million.

Discover shares rose $1.16, or +3.2%, in premarket trading Thursday.

The Bottom Line

Shares of Discover Financial Services ( DFS ) have a 1.08% dividend yield, based on last night's closing stock price of $37.02. The stock has technical support in the $32-$34 price area. The shares are trading near all-time highs.

Discover Financial Services ( DFS ) is not recommended at this time, holding a Dividend.com 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 Nasdaq, Inc.

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

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