Discover Financial profit misses as provisions rise

Mon Oct 21, 2013 5:06pm EDT

(Reuters) - Discover Financial Services (DFS.N) reported a 7 percent fall in quarterly profit that narrowly missed Wall Street estimates as the credit card company put aside more money to cover defaults.

Discover shares fell more than 5 percent in extended trading.

The payment processing network set aside $333 million to cover future bad debt, up from $136 million a year earlier.

Credit card loans rose 4 percent to $50.4 billion in the quarter ended September 30. Delinquencies over 30 days fell to 1.67 percent from 1.83 percent.

Net profit fell to $593 million, or $1.20 per share, in the third quarter, from $637 million, or $1.24 per share.

Revenue, net of interest expense, increased 3 percent to $2.06 billion.

Analysts on average had expected earnings of $1.21 per share on revenue of $2.07 billion, according to Thomson Reuters I/B/E/S.

The company's shares, which have risen about 7 percent this month, fell to $51.06 in trading after the bell after closing at $53.74 on the New York Stock Exchange.

(Reporting by Aman Shah in Bangalore; Editing by Don Sebastian, Maju Samuel)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.