Discover Earnings: Strong Bottom-Line Results as Discover Sells Its Student Loan Business
Narrow-moat Discover reported strong second-quarter results as the bank benefited from good net interest income growth and a sequential improvement in credit results. Net revenue increased 17% from last year to $4.5 billion, though this included a favorable litigation settlement that drove a $211 million increase in its other income line item. Meanwhile, earnings per share jumped 71% from last year to $6.06 as the firm also benefited from a $869 million reserve release from the sale of its private student loan portfolio. While Discover did benefit from two significant one-time gains, inflating its bottom-line results, the underlying performance of the firm was strong enough that it would have been a solid quarter regardless.