Investing.com – Discover Financial Services reported mixed first-quarter results Wednesday, as earnings missed but revenue beat analysts’ forecasts.
Discover Financial Services (NYSE:) rose slightly 1.7% in pre-market trading on Thursday.
For the quarter ended March 31, Discover Financial Services reported earnings of $1.10 per share on revenue of $4.21 billion. Analysts polled by Investing.com expected EPS of $2.95 on revenue of $4.07 billion.
Total Discover card volume was $53.24 billion, down from $54.13 billion a year earlier.
The net write-off rate, a measure of loan portfolio performance, increased 220 basis points to 4.92% compared to the same period a year earlier, driven “by the continued seasoning of recent vintages with higher default trends,” the company said. A higher net write-off rate typically signals that a lender is experiencing a higher level of loan losses.
The company set aside more cash for bad debt or increased provisions for credit losses to $1.50 billion from $1.10 billion a year earlier.
The quarterly results come as the company looks to close its $35 billion merger with Capital One later this year or early next year.
In the note covering the report, Goldman Sachs analysts said they will be looking for several key insights on the earnings call, including “more detail on the outlook for 2024, where it now expects slightly better loan growth and a tightening of the band high of his credit. guide.”
Additionally, analysts are awaiting further details on what caused the $799 million charge the company took related to the card misclassification remediation reserve, more information on the company’s credit outlook, and “ any updates regarding the timing of the ongoing merger with Capital One. “
(Yasin Ebrahim contributed reporting)