Discover posts 3rd quarter profit helped by gain from lawsuit, reduces loan-loss reserves

Discover 3Q profit rises, reserves lowered

CHARLOTTE, N.C. — Discover Financial Services says it was profitable during its fiscal third quarter, helped by a payment from a lawsuit settlement.

The credit card lender said Thursday that its earnings surged to $559.4 million, or $1.07 per share, during the three months ended Aug. 31. That’s up from $180.1 million, or 37 cents per hare, a year earlier.

The latest results were bolstered by an estimated $287 million after taxes related to a settlement of an antitrust lawsuit with Visa Inc. and MasterCard Inc.

As with other credit card lenders, Riverwoods, Ill.-based Discover continues to face card losses as customers fall behind on payments. During the quarter, however, it nearly cut in half its loan-loss reserves.