Credit Card Debt Blog

Spinoff costs drove net income at Discover Financial Services down 16 percentage in the 3rd one-fourth and flattened net income from U.S. recognition cards, the company announced Tuesday in its first one-fourth as an independent company.

Discover's third-quarter nett income dipped to $202 million, or 42 cents per share, down from $241 million for the 3rd one-fourth of 2006. The Riverwoods, Ill.-based company attributed the driblet to costs associated with its spinoff from New House Of York depository financial institution Lewis Henry Morgan Francis Edgar Stanley on June 30.

For its U.S. card business, pretax income remained unchanged at $387 million, in portion owed to $5 million in spinoff costs and higher disbursals in concern development and marketing.

Credit quality remained strong, with just 3.7 percentage of recognition card loans written off as bad debt in the 3rd quarter, down from 4 percentage in the former quarter, but up slightly from 3.55 percentage a twelvemonth ago, Discover's head executive director officer, Saint David Nelms, told investors in a conference phone call Tuesday morning.

"Despite some indicants that delinquency rates may lift in the future, our recognition public presentation goes on to be outstanding," Nelms said. Improving merchandiser credence of the Discover card would go on to be a company priority, Nelms added.

Discover uses almost 1,500 people in Delaware, most in its client service phone call centre near New Castle. The phone phone call centre in Delaware supervises and organizes incoming phone calls for Discover's four U.S. call centers. The other three are located in Phoenix; Lake Park, Utah; and New Albany, Ohio.

Shares of Discover drop 54 cents, or 2.43 percent, to $21.72 Tuesday on the New House Of York Stock Exchange. Contact Leslie A. Pappas at 324-2880 or .