Discover Sinks After Falling Short of Earnings Estimates
The company’s CEO said:
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.
Volume on credit card sales grew 6% year-over-year and net interest margin rose 34 basis points to 9.44%. The delinquency rate for bills more than 30 days past due fell to 1.86% and the net charge-off rate fell to 2.29%, down 95 basis points from a year ago and down 14 basis points sequentially.
Discover did not provide guidance, but the consensus estimates for the first quarter of 2013 call for EPS of $1.11 on revenues of $1.98 billion. For the full fiscal year ending next November, EPS is forecast at $4.35 on revenues of $8.02 billion.
Shares are down 4% in early trading this morning, at $38.15 in a 52-week range of $23.75 to $42.08. Thomson Reuters had a consensus analyst price target of around $45.75 before today’s results were announced.