Higher card use, better payments lift Discover 2Q

June 23, 2011 - 9:00 AM
Earns Discover

Steve Wheelock holds up his Discover Card in San Francisco, Wednesday, June 22, 2011. Discover Financial Services said Thursday, June 23, its second-quarter profit more than tripled as customers used their cards more and got better about making payments on time.(AP Photo/Paul Sakuma)

NEW YORK (AP) — Discover Financial Services says its second-quarter profit more than tripled as customers used their cards more and got better about making payments on time.

The Riverwoods, Ill., credit card company says net income leaped to $593 million, or $1.09 per share. That is well above Wall Street's expectation for profit of 75 cents per share.

More use of Discover cards pushed sales volume up 9 percent and boosted the number of transactions the company's networks processed.

Customers also got much better paying their bills, so late payments and write offs of uncollected balances both dropped sharply from last year. That let Discover release $401 million from the reserves it keeps to cover unpaid bills.

The company's banking operations also reported big gains, helped by the recently acquired Student Loan Corp.