Discover Financial (DFS) Q2 Earnings: What's In The Cards?
Zacks Investment Research | Jul 24, 2017 10:09PM ET
Discover Financial Services (NYSE:DFS) will release second-quarter 2017 results on Jul 26, after market close.
Last quarter, the company delivered a positive earnings surprise of 0.70%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Discover Financial is likely to witness solid revenue growth driven by strong loan growth which is one of its key focus areas.
The company’s PULSE business is likely to continue its recent trend of modest growth.
The recently launched Cashback Match program is expected to aid revenue growth by boosting sustained customer engagement beyond the promotion period.
The company’s frequently undertaken share repurchase programs aimed at enhancing shareholders’ value, is expected to impact the bottom line positively by reducing the outstanding share count.
Nevertheless, Discover Financial’s operating expenses have been showing a flat trend over past few quarters, but marketing expenses are likely to rise due to its extensively undertaken promotional activities.
Also, surging medical costs for individual ACA (Affordable Care Act) compliant products might limit the margin.
In addition, rising level of debt is likely to result in an increase in interest expenses in the second quarter, limiting the margin.
Earnings Whispers
Our proven model does not conclusively show that Discover Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Zacks Investment Research
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