Increased borrowing and spending helps send Discover's 3Q profit up nearly 9 percent
RIVERWOODS, Ill. (AP) -- Discover Financial Services' third-quarter net income increased nearly 9 percent to beat market expectations.
The credit card issuer and lender's gains were made on increased credit card spending and overall lending.
Discover said Tuesday that sales volume for its namesake card increased 5.8 percent and its total loans grew 7.4 percent to $67.4 billion. Credit card loans increased 6.6 percent, personal loans increased 20.9 percent and private student loans increased 4.5 percent.
The Riverwoods, Illinois-based company's latest results suggest consumers are feeling better about spending and taking on debt.
However, the late-payment rate by its cardholders did edge up higher during the quarter. The rate of card loans more than 30 days past due rose to 1.71 percent, up 4 basis points from the year-ago period.
For the period that ended Sept. 30, Discover's net income after paying preferred dividends rose to $630 million, or $1.37 per share. That compares with net income of $579 million, or $1.20 per share, a year earlier. Revenue net of interest expense rose to $2.19 billion from $2.06 billion.
Analysts polled by FactSet expected earnings of $1.34 per share on revenue of $2.2 billion.
Discover shares ended regular trading up $1.68 to $64.38 and fell 28 cents to reach $64.10 extended trading following the report.