Discover Financial Services (NYSE: DFS, DFS message board) share price took off for a ride on Thursday, adding nearly 10% shortly after the market opened. Grim market condition and distrust in successful banking sector recovery doesn't seem to have slowed down the credit card processing and issuance business.
The company reported $0.43 EPS, slightly better than over Q2 2008 when it was 42 cents per share. Overall net income was slightly lower as previous year the company had some additional proceeds from discontinued operations. However $226 million in profit made an outstanding improvement considering the tough market situation. The company has actually moved forward on a year-to-year basis.
The sharp rise in share price has clearly demonstrated how unexpected Discover's results were. Analyst had a consensus projection of $0.3 loss per share, so beating that is likely to boost the current share price uptrend or at least prolong its sustainability.
The company's financial state is pretty robust and they haven't experienced any losses throughout the market crisis (although last quarter would have been non-profitable if not proceeds from a lawsuit). Considering the US economy is beginning to recover on a sales growth basis, the company is likely to experience a moderate boost as well.
Reference:More details in a press release
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