Synchrony Financial (SYF) Tops Q2 EPS by 10c, Miss on Revenues

July 27, 2018 6:32 AM EDT

Synchrony Financial (NYSE: SYF) reported Q2 EPS of $0.92, $0.10 better than the analyst estimate of $0.82. Revenue for the quarter came in at $3.74 billion versus the consensus estimate of $3.83 billion.

  • Net interest income increased 3% from the second quarter of 2017 to $3.7 billion
  • Loan receivables grew $3 billion, or 5%, from the second quarter of 2017 to $79 billion
  • Purchase volume increased 2% from the second quarter of 2017 to $34 billion
  • Deposits grew $6 billion, or 12%, from the second quarter of 2017 to $59 billion
  • Closed the PayPal transaction on July 2, 2018, acquiring $7.6 billion in receivables and making Synchrony the exclusive issuer of PayPal Credit in the U.S.
  • Walmart program agreement will not be renewed and will expire July 31, 2019; expect strategic options will fully replace diluted earnings per share impact of program non-renewal (1)
  • Added new partnerships: Furniture Row and The Good Feet Store
  • Renewed relationships: Ashley HomeStore, Havertys, Sleep Number, LCA Vision, and Robbins Brothers
  • Launched a new Dual Card with Belk
  • Acquired Loop Commerce, a technology leader in digital and in-store gifting services
  • Announced new capital plan increasing quarterly common stock dividend to $0.21 per share and share repurchases of up to $2.2 billion of Synchrony Financial common stock

“We have continued to deliver solid results, driving organic growth while launching new programs and renewing key relationships. We are pleased to have closed the PayPal transaction, which is now a top 5 program. Our relationship with PayPal is exactly what we look for in a program – strong engagement, significant growth opportunities, and good economic alignment with the partner. Extending this relationship will enable us to leverage new opportunities to meaningfully expand this program and drive growth. And while the Walmart program will not be renewed as we were unable to reach terms that made economic sense for our company and our shareholders, we have strategic options that we expect will fully replace the EPS impact,” said Margaret Keane, President and Chief Executive Officer of Synchrony Financial. “We remain focused on the risk-adjusted returns of our programs and returning capital to shareholders, as evidenced by our actions this quarter, which included significantly increasing the quarterly common stock dividend and share repurchase program.”

For earnings history and earnings-related data on Synchrony Financial (SYF) click here.

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