What Has Driven Discover Financial’s EPS Growth In The Last Three Years?

-9.55%
Downside
128
Market
116
Trefis
DFS: Discover Financial Services logo
DFS
Discover Financial Services

dfs eps 2

Over the last three years, Discover’s earnings before tax have fallen by close to 3%. Despite a 70 basis point decrease in effective tax rate, the company’s net income has also declined by 2.5%. However, despite these factors, the company’s reported diluted earnings per share has grown by 3.1% due to a 10% reduction in share count. This growth in EPS is deceptive and is unlikely to be sustainable in the future.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Discover
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