Discover Financial Jumps After Q3 Results

Heading into the closing bell on Thursday, shares of Discover Financial Services

were up nearly 7 percent and sitting near their highs of the day. The catalyst for the move in the stock was the company's third-quarter earnings results, which were released prior to the opening bell. Both earnings per share and revenues came in better than expected. "Our business segments demonstrated solid performance during the quarter. Card sales and receivables grew in a challenging environment while credit quality continued to improve," Chairman and CEO David Nelms said in a statement. "In payments, we signed agreements with PayPal, Industrial and Commercial Bank of China, and most recently Russian Standard Bank to enhance our global presence and leverage our existing infrastructure," Nelms added. The company reported earnings of $621 million or $1.21 per share, compared to $642 million or $1.18 per share, in the year ago period. The discrepancy in earnings per share between the quarters was due to a lower share count. The results topped analysts' consensus EPS estimates of $1.04. Net revenues in the period were $1.96 billion, versus $1.79 billion in last year's third quarter. This also exceeded Wall Street analysts' consensus revenue estimates of $1.90 billion. Net interest income at the company was up 11 percent to $1.37 billion, while net interest margin increased by 18 basis points to 9.44 percent. Discover's credit card net charge-off rate fell 142 basis points to 2.43 percent. Both credit card loan delinquencies and net charge-offs were at historic lows. After Thursday's rally, DFS has now soared more than 64 percent in 2012 and 59 percent over the last year.