Discover Financial CEO:To Repay TARP Funds As Soon As Is Prudent
19 Marzo 2009 - 5:00PM
Dow Jones News
Discover Financial Services (DFS) will repay federal funds as
soon as it's "prudent" to do so, said Chief Executive David Nelms,
during a discussion of the company's quarterly earnings with
analysts and investors.
The company last week got $1.2 billion from the U.S. Treasury's
Troubled Asset Relief Program in exchange for a stake in the
company.
Nelms also said Discover's decision to slash its dividend will
bolster the company's capital position in an "uncertain economic
environment."
Earlier Thursday, Discover cut its quarterly dividend to 2 cents
per share from 6 cents. This move will save $80 million
annually.
For the fiscal first quarter ended Feb. 28, Discover posted net
income of $120.4 million, or 25 cents a share, up from $81.2
million, or 17 cents a share, a year earlier.
The latest results include an after tax $297 million gain
related to an antitrust settlement. Net income a year ago included
a $158 million charge on discontinued operations. Excluding this
charge, Discover's earnings from continuing operations fell by half
compared with a year earlier.
Discover shares recently traded at $7.11, down 13 cents or 1.8%.
So far this year, its stock has lost about 26% of its value. Unlike
most of its peers, which either issue plastic or process the
transactions, Discover does both.
-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729;
aparajita.saha-bubna@dowjones.com