RIVERWOODS, Ill. – Shares of Discover Financial Services declined almost 11% yesterday after the parent of Pulse EFT announced a 65% drop in first quarter profits, to $81.2 million.
The main reason for the drop in earnings was the sale of the company’s British credit card unit, known as Goldfish. In February, Discover said it was selling Goldfish to Barclays Bank PLC for about $70 million. Discover said Wednesday the sale resulted in a $158 million loss.
The company’s share price, which debuted at $32 last June when Discover was spun off from Morgan Stanley, dropped below $16 yesterday after the news.
The company's U.S. card segment had pre-tax income of $375 million, down 6% from the same period a year ago. Discover saw sales volume rise 5%, but it also set aside $305.6 million in anticipation of loan losses, double the amount for last year’s first quarter.
