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Investing.com -- Discover Financial Services (NYSE:DFS) reported first quarter 2025 earnings that surpassed analyst expectations, driven by a strong net interest margin and positive credit trends.
The credit card issuer and financial services company posted net income of $1.1 billion or $4.25 per diluted share for Q1 2025, compared to $851 million or $3.25 per share in Q1 2024. The results beat analyst estimates of $3.35 per share.
Revenue net of interest expense rose 2% YoY to $4.25 billion, slightly above the consensus estimate of $4.23 billion.
"Discover’s solid first quarter financial performance benefited from a strong net interest margin and positive credit trends," said Michael Shepherd, Discover’s Interim CEO and President. "These results reflect our good execution and the strength of our business model."
Total (EPA:TTEF) loans ended the quarter at $117.4 billion, down 7% YoY due to the student loan sale, but up 1% when adjusting for the sale. Credit card loans were relatively flat at $99.0 billion.
The total net charge-off rate was 4.99%, up 7 basis points from the prior year period. The credit card net charge-off rate improved to 5.47%, down 19 basis points YoY.
Discover also noted that Capital One (NYSE:COF) has received all required approvals for their planned merger, which is expected to close around May 18, 2025.
The company declared a quarterly cash dividend of $0.70 per share, payable on June 5, 2025 to shareholders of record as of May 23, 2025.