Discover 2Q Net Surges as Credit Environment Improves

By Matt Egan Features FOXBusiness

Boosted by improving credit conditions, Discover Financial (DFS) revealed on Thursday it more than doubled its profits in the second quarter to an all-time record.

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The card giant said it earned $600 million, or $1.09 a share, last quarter, compared with a profit of $258 million, or 33 cents a share, a year earlier. Analysts had called for EPS of just 75 cents.

Riverwoods-Ill.-based Discover grew its revenue by 4.6% to $1.74 billion, surpassing the Streets view of $1.7 billion.

Underscoring the improving credit environment, Discover said its net charge-offs slid to 4.42% from 7.97% the year earlier and 5.42% the previous quarter.

Provisions for loan losses tumbled to $176 million from $724 million in the 2010 period and $418 million in the first quarter.

Discover said total loans grew by 5% last quarter to $52.5 billion.  Total Discover Card volume jumped 11% to $26.93 billion.

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Shares of Discover gained 1.31% to $23.90 ahead of Thursdays open. The stock had already been up 27% on the year and nearly 70% from 52 weeks ago.