When Discover Financial Services (NYSE:DFS) releases its fourth quarter earnings on Thursday, December 20, 2012, it is expected to report earnings that are up 17.9% from a year ago. The consensus estimate is $1.12 per share, up from earnings of 95 cents per share a year ago.
Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: 5 Tricks Companies Use During Earnings Season
What to Expect: The figure has risen from $1.01 over the past three months. Analysts are projecting earnings of $4.51 per share for the fiscal year.
Disco is expected to report revenue of $1.96 billion for the quarter, down by 9.5% from last year's figure of $2.17 billion. Revenue of $7.62 billion is expected for the fiscal year.
Company Performance: These last four quarters have marked year-over-year revenue growth. It rose 6.4% in the third quarter, 3.4% in the second quarter, 3.8% in the first quarter and 9.9% in the fourth quarter of the last fiscal year.
Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios
The stock price has increased from $38.51 on September 18, 2012 to $39.53 over the past quarter. Disco's best recent streak was when its price gained $2.95 per share between November 15, 2012 and November 20, 2012.
The Competition: Discover Financial Services is a credit card issuer in the United States and an electronic payment services company. The majority of analysts (13 of 18) rate Disco a buy. They are slightly more optimistic about the stock recently, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the consumer financial services industry is Visa (V).