Discover 4Q profit leaps 46 pct as card use rises

By the Associated Press | December 15, 2011 | 9:00 AM EST

NEW YORK (AP) — Discover Financial Services says higher spending at the start of the holiday shopping season helped its fourth-quarter profit rise 46 percent.

The Riverwoods, Ill., credit card company says its net income available to common shareholders for the three months ended Nov. 30 was $508 million, or 95 cents per share. Revenue rose 13 percent to $1.81 billion.

Wall Street was expecting profit of 89 cents per share, on $1.8 billion in revenue, according to FactSet.

The results reflected an 8 percent increase in Discover card use. Credit card balances rose 3 percent, while late payments and defaults slid, as customer payment habits continued to improve.

The company says its student loan operations also provided a boost to results.

Discover is increasing its dividend by 67 percent to 10 cents.