Discover Financial Services reported an 11% drop in fiscal third-quarter net income Thursday amid an 80% surge to its provision for loan losses as delinquencies and charge-offs continued to rise.
While noting that the consumer environment and funding costs "continue to be challenging," Chief Executive David Nelms said the company's latest results "demonstrate the underlying quality of our customer base and reflect our disciplined loan underwriting process and multi-channel funding strategy."
For the quarter ended Aug. 31, Riverwoods, Ill., credit-card company - which spun off from brokerage Morgan Stanley in July 2007 - posted net income of $180.1 million, or 37 cents a share, down from $202.2 million, or 42 cents a share, a year earlier. Prior-year results included a nine-cent loss from discontinued operations related to the Goldfish business in the U.K. it sold to Barclays PLC in late March.
