Discover Financial's profit declines 6 pct. in 1Q

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Associated Press

Posted on April 22, 2014 at 4:00 PM

Updated Tuesday, Apr 22 at 4:01 PM

LOS ANGELES (AP) — Discover Financial Services says its net income fell 6 percent in the first three months of the year as the company set aside more money to cover potential loan losses, offsetting loan growth.

The lender said Tuesday that its profit after paying preferred dividends was $618 million, or $1.31 per share, in the three months ended March 31. That compares with $659 million, or $1.33 per share, in the prior-year quarter.

Revenue net of interest expense grew about 4 percent to $2.08 billion from $1.99 billion.

Analysts polled by FactSet expected earnings of $1.25 per share on $2.11 billion in revenue.

Total loans grew 6 percent from a year earlier, while Discover Card sales volume rose 3 percent.

Shares of Riverwoods, Ill.-based Discover fell 1.2 percent in after-market trading.

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