It has been about a month since the last earnings report for Discover (DFS) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Discover due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Discover Financial Q1 Earnings Miss on High CostsD ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 Commission File Number 001-33378 DISCOVER FINANCIAL SERVICES (Exact name of registrant as specified in its charter) Delaware ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or other jurisdiction of incorporation or organization) For ...

Discover Financial Services (DFS) reported first-quarter 2024 adjusted earnings per share (EPS) of $1.10, which missed the Zacks Consensus Estimate by 63.1%. The bottom line declined 69.3% year over year.DFS' revenues, net of interest expenses, climbed 12.3% year over year to $4.2 billion. The top line beat the consensus mark by 3.7%.The weak first-quarter earnings were due to escalating operating costs, feeble contributions from the Digital Banking segment and higher provision for credit losses. The compan ...

The $35 billion deal for Capital One to buy Discover Financial Services remains on track.And in a truncated first-quarter earnings call — where the usual question-and-answer session was not part of the proceedings — Discover’s management noted that consumer loans are on the upswing. In the meantime, credit card spending has been pressured by inflation.CFO John Greene said in his prepared remarks on the Thursday (April 18) call that card sales were down 1% compared to the prior year quarter.“Sales slowed acr ...

Financial Data and Key Metrics - Net income for Q1 2024 was $308 million, down 68% YoY, primarily due to a $799 million increase in the reserve for remediation related to the card misclassification issue [10] - Excluding the remediation reserve, net income would have been approximately $915 million, with EPS of $3.50 per share and an efficiency ratio under 36% [11] - Net interest margin (NIM) was 11.03%, down 31 basis points YoY but up 5 basis points sequentially [11] - Total net charge-offs were 4.92%, up 220 basis points YoY and 81 basis points sequentially [16] - Common equity Tier 1 ratio was 10.9%, down 40 basis points sequentially [18] Business Line Performance - Card receivables increased 11% YoY, driven by lower payment rates and prior year new account growth [12] - Discover card sales declined 1% YoY, with the largest decline in the everyday category (supermarkets, gas, wholesale clubs) [12] - Personal loans grew 21% YoY, with 50% of Q1 originations used for debt consolidation [13] - Student loans were flat YoY, with the company stopping new applications on February 1 and targeting a sale closing in late Q3 or Q4 [13] - Direct-to-consumer deposit balances grew $3 billion, with average deposits up 18% YoY and 4% sequentially [14] Market Performance - Noninterest income increased $113 million or 19%, driven by higher net discount and interchange revenue, loan fee income, and transaction processing revenue from PULSE [14] - PULSE debit volume increased by $13.8 billion or 21% YoY [14] - Rewards rate was 139 basis points, down 2 basis points YoY due to lower cash back match and active management of 5% categories [14] Strategic Direction and Industry Competition - The company is focused on maximizing shareholder value through risk management, compliance, and customer service, while positioning for long-term value creation [7] - The merger with Capital One is progressing, with merger applications submitted to the Federal Reserve and OCC [8] - The combined company aims to be a competitive payments network and well-positioned bank, supporting customer financial goals and community commitments [8] Management Commentary on Operating Environment and Future Outlook - Management expects loan growth in low single digits, driven by declining payment rates and modest new account contributions [19] - Net interest margin is expected to range between 10.7% and 11%, reflecting fewer rate cuts and proactive deposit rate management [19] - Core operating expenses are expected to increase mid-single digits, excluding remediation and merger-related costs [20] - Net charge-offs are expected to range between 4.9% and 5.2%, with the base case at the lower end of the range [20] - Share repurchases are suspended, and dividends will not be increased due to the merger agreement [20] Other Important Information - The company increased its liability for the card misclassification issue, which is expected to advance the resolution of the issue [6][10] - The CFPB late fee proposal, if implemented, could result in a pretax reduction of around $600 million annually [15] - Compliance and risk management expenses for the year are expected to remain around $500 million, excluding remediation-related costs [16] Q&A Session - No Q&A session was held during the call, with questions directed to the Investor Relations team [3][4]

Discover (DFS) reported $4.21 billion in revenue for the quarter ended March 2024, representing a year-over-year increase of 12.2%. EPS of $1.10 for the same period compares to $3.58 a year ago.The reported revenue represents a surprise of +3.68% over the Zacks Consensus Estimate of $4.06 billion. With the consensus EPS estimate being $2.98, the EPS surprise was -63.09%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine thei ...

Discover (DFS) came out with quarterly earnings of $1.10 per share, missing the Zacks Consensus Estimate of $2.98 per share. This compares to earnings of $3.58 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -63.09%. A quarter ago, it was expected that this credit card issuer and lender would post earnings of $2.50 per share when it actually produced earnings of $1.54, delivering a surprise of -38.40%.Over the last four quarte ...

DISCOVER FINANCIAL SERVICES Exhibit 99.2 EARNINGS SUMMARY (unaudited, in millions, except per share statistics) Quarter Ended Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Mar 31, 2024 vs. 2024 2023 2023 2023 20231 Mar 31, 2023 EARNINGS SUMMARY Interest Income $4,948 $4,868 $4,610 $4,290 $4,077 $871 21 % Interest Expense 1,461 1,400 1,288 1,113 945 516 55 % Net Interest Income 3,487 3,468 3,322 3,177 3,132 355 11 % Discount/Interchange Revenue 1,074 1,158 1,164 1,158 1,046 28 3 % Rewards Cost 703 788 787 788 716 ...

RIVERWOODS, ILLINOIS - FEBRUARY 19: A sign sits at the entrance of the Discover Financial Services ... [+] corporate headquarters campus on February 19, 2024 in Riverwoods, Illinois. Capital One plans to buy Discover Financial Services, a deal that would merge two of the nation's largest credit-card companies. (Photo by Scott Olson/Getty Images)Getty ImagesDiscover Financial (NYSE: DFS) is scheduled to report its fiscal Q1 2024 results on Wednesday, April 17, 2023 (after market close). We expect Discover Fi ...

Discover Financial Services (DFS) is set to report its first-quarter 2024 results on Apr 17, after the closing bell.What Do the Estimates Say?The Zacks Consensus Estimate for first-quarter earnings per share of $2.96 suggests a 17.3% decrease from the prior-year figure of $3.58. The consensus mark remained stable over the past week. The consensus estimate for first-quarter revenues of $4.1 billion indicates an 8.2% increase from the year-ago reported figure.Discover Financial missed the consensus estimate f ...