Q1 2024 Earnings Summary
Reported on Jan 4, 2025 (After Market Close)
Pre-Earnings Price$124.27Last close (Apr 18, 2024)
Post-Earnings Price$125.66Open (Apr 19, 2024)
Price Change
$1.39(+1.12%)
- Strong core financial performance with double-digit revenue expansion from loan growth , a resilient net interest margin expected to increase to 10.7% to 11% in 2024 , and average deposits up 18% year-over-year.
- Stabilizing credit performance, with delinquency formation improving and losses expected to peak and plateau in mid to late 2024. The company believes the credit reserve rate is likely at or near peak levels.
- Proactive management of deposit rates with a cumulative deposit beta now about 70% , providing opportunities to manage deposit costs and support net interest margin expansion.
- Net income decreased by 68% to $308 million due to a $799 million increase to the reserve for remediation related to the card misclassification issue.
- Card sales declined by 1% year-over-year, and the company expects sales to be flat to slightly negative this year as consumers, particularly lower-income households, spend less amid inflation.
- Increased liabilities and ongoing compliance issues: Discover significantly increased its liability for the card misclassification issue after extensive discussions with merchants and regulators, indicating potential regulatory risks.