Synchrony Financial (NYSE:SYF) saw its shares edge higher in pre-market trading Wednesday after posting third-quarter results that handily topped Wall Street forecasts, driven by stronger credit performance and robust net interest income.
The stock climbed 1.59% ahead of the market open following the earnings release.
The company reported earnings of $2.86 per share, well above analysts’ expectations of $2.21. Revenue reached $3.82 billion, just above the consensus estimate of $3.8 billion. Net income rose to $1.1 billion for the quarter, a 37% increase from $789 million a year earlier. Purchase volume rose 2% to $46 billion, while loan receivables declined 2% to $100.2 billion.
“Synchrony’s third quarter performance was highlighted by a return to purchase volume growth, driven by stronger spend trends across all five of our platforms, and continued strength in our credit performance,” said Brian Doubles, Synchrony’s President and Chief Executive Officer.
The company’s provision for credit losses dropped by $451 million to $1.1 billion, reflecting lower net charge-offs and a $152 million reserve release compared to a $44 million build last year. Net charge-offs improved to 5.16% of average loan receivables from 6.06% a year ago.
Net interest margin expanded by 58 basis points to 15.62%, while the efficiency ratio rose 140 basis points to 32.6%. Return on assets improved by 100 basis points to 3.6%, and return on equity increased by 5 percentage points to 25.1%.
“Our Board approved an incremental $1.0 billion in our share repurchase authorization, reflecting Synchrony’s disciplined focus on risk-adjusted returns, our strong capital generation capacity and the inherent resilience of our business,” said Brian Wenzel, Synchrony’s Executive Vice President and Chief Financial Officer.
The company returned $971 million to shareholders during the quarter, including $861 million in share buybacks and $110 million in dividends. Its board also approved an additional $1 billion in share repurchases, lifting the total remaining authorization to $2.1 billion through June 30, 2026.
Synchrony Financial stock price
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