Synchrony Financial's (SYF) Earnings Surpass Estimates In Q1
Zacks Investment Research | Apr 19, 2018 11:46PM ET
Synchrony Financial’s (NYSE:SYF) first-quarter 2018 earnings per share of 83 cents surpassed the Zacks Consensus Estimate of 74 cents by 12.2%. The bottom line also improved 36% year over year.
Results in Detail
The company’s net interest income increased 7% to $3.8 billion in the first quarter, primarily owing to strong loan receivables growth.
However, other income was down 19.4% to $75 million, primarily due to higher loyalty program expenses, partially offset by increased interchange revenues.
Loan receivables rose 6% year over year to $78 billion.
Deposits were $57 billion, up 10% from the year-ago quarter.
Purchase volume expanded 3% from the first quarter of 2017 to $30 billion.
Provision for loan loss increased 4% year over year to $1.4 billion on credit normalization.
Total other expenses increased 8.8% to $988 million, primarily due to business growth and marketing expenses.
Sales Platforms Update
Retail Card
Interest and fees on loans grew 7% year over year, primarily driven by loan receivables growth. Loan receivables grew 5% on broad-based across partner programs.
Purchase volume and average active account rose 2% each.
Payment Solutions
Interest and fees on loans rose 9% year over year on the back of period-end loan receivables growth of 8%. Loan receivables growth was led by home furnishings and automotive.
Purchase volume growth was 7%, adjusted to exclude the impact of the hhgregg bankruptcy, and a 5% rise in average active account.
CareCredit
Interest and fees on loans increased 8% year over year, attributable to period-end loan receivables growth of 8%. Loan receivables growth was enhanced by dental and veterinary.
While purchase volume registered 8% growth, average active account reported 7% rise.
Synchrony Financial Price, Consensus and EPS Surprise
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