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Discover Financial Services' Fourth Quarter Earnings Report
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DFS
Discover Financial Services (NYSE:DFS) announced its results for the most recent quarter on December 20, 2012. Discover Financial Services is a credit card issuer in the United States and an electronic payment services company.
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: Surprising Earnings Results
The Numbers: Discover Financial Services announced $1.07 per share versus the $1.13 per share estimate. The company's net income for the quarter was $551 million. This is 7.5% higher than the year-ago quarter. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "Our strategy and business model are working as we achieved organic growth in all of our lending products," said David Nelms, chairman and CEO of Discover. "I am proud of our strong performance this year and our achievement of record net income, record volumes and a strong return on equity. In 2012, we established new partnerships in payments, diversified our direct banking product offerings and demonstrated our commitment to returning excess capital, which we are further emphasizing with a 40% increase in our dividend."
A Look Back: Net income has increased 15.2% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 46.6% from the year-earlier quarter.
Looking Ahead: For next quarter, analysts have a more positive outlook about the company's expected results. The average estimate for the first quarter of the next fiscal year is $1.11 per share, up from $1 90 days ago. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. For the fiscal year, the average estimate has moved up from $4.24 a share to $4.52 over the last ninety days.
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: Surprising Earnings Results
The Numbers: Discover Financial Services announced $1.07 per share versus the $1.13 per share estimate. The company's net income for the quarter was $551 million. This is 7.5% higher than the year-ago quarter. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "Our strategy and business model are working as we achieved organic growth in all of our lending products," said David Nelms, chairman and CEO of Discover. "I am proud of our strong performance this year and our achievement of record net income, record volumes and a strong return on equity. In 2012, we established new partnerships in payments, diversified our direct banking product offerings and demonstrated our commitment to returning excess capital, which we are further emphasizing with a 40% increase in our dividend."
A Look Back: Net income has increased 15.2% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 46.6% from the year-earlier quarter.
Looking Ahead: For next quarter, analysts have a more positive outlook about the company's expected results. The average estimate for the first quarter of the next fiscal year is $1.11 per share, up from $1 90 days ago. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. For the fiscal year, the average estimate has moved up from $4.24 a share to $4.52 over the last ninety days.
by
Investopedia Staff
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