Stock Monitor: Capital One Financial Post Earnings Reporting

LONDON, UK / ACCESSWIRE / January 29, 2018 / Active-Investors.com has just released a free earnings report on Discover Financial Services (NYSE: DFS). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=DFS. The Company posted its financial results on January 24, 2018, for the fourth quarter of the fiscal year 2017 (Q4 FY17). The Riverwoods, Illinois-based lender's both total loans and consumer deposits rose 9% y-o-y. Register today and get access to over 1000 Free Research Reports by joining our site below:

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Active-Investors.com is currently working on the research report for Capital One Financial Corporation (NYSE: COF), which also belongs to the Financial sector as the Company Discover Financial Services. Do not miss out and become a member today for free to access this upcoming report at:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Discover Financial Services most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=DFS

Earnings Highlights and Summary

During the three months ended December 31, 2017, Discover Financial reported revenue, net of interest expenses, of $2.61 billion, which came in above the $2.36 billion recorded in Q4 FY16, and also outperformed market consensus expectations of $1.85 billion. The Company's net interest income increased to $2.12 billion in Q4 FY17 from $1.89 billion in the year ago same quarter. Driven by higher discount and interchange revenue, total other income grew to $494 million in Q4 FY17 from $466 million in Q4 FY16.

The credit card issuer and lender's net income allocated to common stockholders came in at $359 million, or $0.99 per diluted share, for Q4 FY17 versus $550 million, or $1.40 per diluted share, in Q4 FY16. The Company's net income for the reported quarter was reduced by non-recurring charges of $189 million, or $0.52 per diluted share, due to the recently enacted Tax Cuts and Jobs Act.

Performance Metrics

The Company's interest income grew to $2.56 billion in Q4 FY17 from $2.26 billion in the year ago comparable period, driven by a loan growth and a higher net interest margin. Interest expenses came in at $436 million during the reported quarter compared to $366 million in Q4 FY16. Additionally, total other expenses rose to $1.04 billion in Q4 FY17 from $897 million in Q4 FY16.

As on December 31, 2017, average loans balance stood at $81.80 billion, which came in above $74.76 billion as on December 31, 2016. Furthermore, the Company's consumer deposits grew $3.4 billion, or 9%, to $39.4 billion y-o-y at the close of Q4 FY17.

Discover Financial reported a return on equity (ROE) of 14% in the fourth quarter of FY17. Net interest margin was 10.28% in Q4 FY17, rising 21 basis points y-o-y, due to a rise in the prime rate, partially offset by higher interest charge-offs and a change in portfolio mix.

Provision for loan losses increased by $99 million to $678 million in Q4 FY17, due to higher net charge-offs, partially offset by a smaller reserve build.

Segment Performance

In Q4 FY17, the Direct Banking segment's pre-tax income rose $2 million to $870 million y-o-y, primarily attributed to a higher provision for loan losses and operating expenses.

The Payment Services segment's pre-tax income was $29 million in Q4 FY17, up $14 million from the $15 million recorded in Q4 FY16, primarily driven by lower operating expenses, as well as higher transaction processing and interchange revenue.

Dividend

In a separate press release on January 18, 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.35 per share of common stock, payable on March 08, 2018, to holders of record at the close of business as on February 22, 2018.

Stock Performance Snapshot

January 26, 2018 - At Friday's closing bell, Discover Financial Services' stock was slightly up 0.85%, ending the trading session at $80.98.

Volume traded for the day: 2.37 million shares, which was above the 3-month average volume of 2.25 million shares.

Stock performance in the last month ? up 4.81%; previous three-month period ? up 24.30%; past twelve-month period ? up 16.77%; and year-to-date ? up 5.28%

After last Friday's close, Discover Financial Services' market cap was at $29.39 billion.

Price to Earnings (P/E) ratio was at 13.93.

The stock has a dividend yield of 1.73%.

The stock is part of the Financial sector, categorized under the Credit Services industry. This sector was up 0.7% at the end of the session.

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