Discover Financial Services, the top performer for the past year in the Standard & Poor’s 500 Financials Index, said fiscal first-quarter profit climbed 36 percent to a record as consumers spent more on credit cards.
Net income for the three months ended Feb. 29 increased to $631 million, or $1.18 a share, from $465 million, or 84 cents, a year earlier, the Riverwoods, Illinois-based company said Wednesday in a statement. That beat the average estimate of 94 cents by 22 analysts in a Bloomberg survey.
Chairman and Chief Executive Officer David Nelms boosted the quarterly dividend 67 percent in December to 10 cents a share and bought back stock as the U.S. economy continued to mend. The lender acquired a portfolio of private student loans from Citigroup Inc. in September and announced a $2 billion share-buyback plan last week after the Federal Reserve announced the results of bank stress tests.
Discover fell 22 cents to $31.64 at 4 p.m. in New York. The shares have climbed 40 percent in the past year, the most of 81 companies in the S&P 500 Financials index.
The lender was one of 30 financial firms subjected to the central bank’s stress tests to demonstrate whether the industry can withstand another severe economic shock. The Fed didn’t object to Discover’s plan to repurchase stock, the company said.
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