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{\"0\":\"BFH posted Q3 operating income of $4.02 per share, topping estimates by 90.5%.\\r\\n\",\"1\":\"Higher credit sales and lower non-interest expenses drove strong year-over-year profit growth.\\r\\n\",\"2\":\"The board hiked dividend by 10% and expanded share repurchase authorization to $340 million.\\r\\n\"}
Bread Financial Holdings’ (BFH - Free Report) operating income of $4.02 per share for the third quarter of 2025 beat the Zacks Consensus Estimate by 90.5%. The bottom line more than doubled year over year.
The quarterly results reflected higher credit sales and reduced non-interest expenses, offset by lower average and end-of-period loans as well as interest income.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Revenues decreased 1.2% year over year to $971 million, primarily due to lower billed late fees resulting from lower delinquencies, higher retailer share arrangements, and a $4 million gain on portfolio sale in 2024. It was partially offset by lower interest expense and the implementation of pricing changes and paper statement fees. The top line, however, beat the consensus estimate by 0.2%.
Credit sales of $6.8 billion increased 5% year over year, driven by new partner growth and increased general-purpose spending. Average loan decreased 1% to $17.6 billion, while end-of-period loan declined 2% to $17.7 billion, due to an increasing payment rate and the ongoing effect of elevated gross losses.
Total interest income decreased 3% to $1.2 billion, in line with our estimate and the Zacks Consensus Estimate.
Net interest margin remains unchanged at 18.8%. The Zacks Consensus Estimate for the metric was 18.2%.
Total non-interest expenses decreased 17%, driven by the prior year impact from repurchased debt.
The delinquency rate of 6% decreased from 6.4% year over year. The net loss rate of 7.4% improved 40 basis points. Pre-tax pre-provision earnings increased 21% year over year to $495 million.
Financial Update
Tangible book value was $56.36 per share, as of Sept. 30, 2025, up 19% year over year. Return on average equity was 22.4%, which expanded 2,200 basis points year over year.
Capital Deployment
The board of directors raised the dividend by 10% to 23 cents per share. The dividend is payable on Dec. 12 to stockholders of record as of Nov. 7.
The board of directors approved a $200 million increase to the existing share repurchase authorization. The company had $140 million remaining under its existing share repurchase authorization, which brings the total amount available for share repurchases to $340 million.
2025 Guidance
Based on the current economic outlook, an increased payment rate, elevated gross credit losses, and visibility into the pipeline and existing partners, BFH projects average credit card and other loans to be flat to slightly down from 2024.
Total revenues (excluding any gain on portfolio sale) are expected to be relatively flat as a result of implemented pricing changes. It is offset by interest rate reductions by the Federal Reserve, lower billed late fees from improving delinquency trends, and a continued shift in risk and product mix.
BFH expects to deliver positive operating leverage, excluding any gain on portfolio sale and the pre-tax impacts from the repurchased debt, including convertible, senior, and subordinated notes.
The net loss rate is expected in the range of 7.8% to 7.9%. Net loss rate is expected to improve given a resilient consumer, credit management actions, and continued risk and product mix shifts.
American Express Company (AXP - Free Report) reported third-quarter 2025 earnings per share (EPS) of $4.14, which beat the Zacks Consensus Estimate by 4.6%. The bottom line climbed 19% year over year. Total revenues, net of interest expense, amounted to $18.4 billion, which beat the Zacks Consensus Estimate by 2.4%. The top line improved 11% year over year in the quarter under review.
Network volumes of $479.2 billion rose 9% year over year in the third quarter, driven by higher U.S. consumer spending. The figure beat the Zacks Consensus Estimate by 1.2%. Total interest income of $6.6 billion increased 8% year over year and surpassed the consensus mark by 3.4%. Provision for credit losses fell 5% year over year to $1.3 billion, benefiting from lower reserve build.
Moody's Corporation (MCO - Free Report) has reported third-quarter 2025 adjusted earnings of $3.92 per share, which outpaced the Zacks Consensus Estimate of $3.70. The bottom line grew 22.1% from the year-ago quarter. After considering certain non-recurring items, net income attributable to Moody's was $646 million or $3.60 per share, up from $534 million or $2.93 per share in the prior-year quarter.
Revenues were $2.01 billion, which surpassed the Zacks Consensus Estimate of $1.96 billion. Also, the top line rose 10.7% year over year. Total expenses were $1.09 billion, up 1.4% year over year. Adjusted operating income of $1.06 billion rose 22.5% year over year. The adjusted operating margin was 52.9%, rising from 47.8% a year ago.
Synchrony Financial (SYF - Free Report) reported third-quarter 2025 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 28.8%. The bottom line gained 47.4% year over year. Net interest income was $4.7 billion, which grew 2.4% year over year. It surpassed the consensus mark by 0.6%. Retailer share arrangements of Synchrony advanced 12% year over year to $1 billion in the quarter under review.
Total deposits dipped 2% year over year to $79.9 billion and fell short of our estimate of $83 billion. Provision for credit losses was $1.1 billion, which tumbled 28.2% year over year on the back of a reserve release. The metric came in lower than our estimate of $1.5 billion.
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BFH Q3 Earnings & Revenues Beat Estimates, Credit Sales Rise Y/Y
Key Takeaways
Bread Financial Holdings’ (BFH - Free Report) operating income of $4.02 per share for the third quarter of 2025 beat the Zacks Consensus Estimate by 90.5%. The bottom line more than doubled year over year.
The quarterly results reflected higher credit sales and reduced non-interest expenses, offset by lower average and end-of-period loans as well as interest income.
Bread Financial Holdings, Inc. Price, Consensus and EPS Surprise
Bread Financial Holdings, Inc. price-consensus-eps-surprise-chart | Bread Financial Holdings, Inc. Quote
Behind the Headlines
Revenues decreased 1.2% year over year to $971 million, primarily due to lower billed late fees resulting from lower delinquencies, higher retailer share arrangements, and a $4 million gain on portfolio sale in 2024. It was partially offset by lower interest expense and the implementation of pricing changes and paper statement fees. The top line, however, beat the consensus estimate by 0.2%.
Credit sales of $6.8 billion increased 5% year over year, driven by new partner growth and increased general-purpose spending.
Average loan decreased 1% to $17.6 billion, while end-of-period loan declined 2% to $17.7 billion, due to an increasing payment rate and the ongoing effect of elevated gross losses.
Total interest income decreased 3% to $1.2 billion, in line with our estimate and the Zacks Consensus Estimate.
Net interest margin remains unchanged at 18.8%. The Zacks Consensus Estimate for the metric was 18.2%.
Total non-interest expenses decreased 17%, driven by the prior year impact from repurchased debt.
The delinquency rate of 6% decreased from 6.4% year over year. The net loss rate of 7.4% improved 40 basis points. Pre-tax pre-provision earnings increased 21% year over year to $495 million.
Financial Update
Tangible book value was $56.36 per share, as of Sept. 30, 2025, up 19% year over year. Return on average equity was 22.4%, which expanded 2,200 basis points year over year.
Capital Deployment
The board of directors raised the dividend by 10% to 23 cents per share. The dividend is payable on Dec. 12 to stockholders of record as of Nov. 7.
The board of directors approved a $200 million increase to the existing share repurchase authorization. The company had $140 million remaining under its existing share repurchase authorization, which brings the total amount available for share repurchases to $340 million.
2025 Guidance
Based on the current economic outlook, an increased payment rate, elevated gross credit losses, and visibility into the pipeline and existing partners, BFH projects average credit card and other loans to be flat to slightly down from 2024.
Total revenues (excluding any gain on portfolio sale) are expected to be relatively flat as a result of implemented pricing changes. It is offset by interest rate reductions by the Federal Reserve, lower billed late fees from improving delinquency trends, and a continued shift in risk and product mix.
BFH expects to deliver positive operating leverage, excluding any gain on portfolio sale and the pre-tax impacts from the repurchased debt, including convertible, senior, and subordinated notes.
The net loss rate is expected in the range of 7.8% to 7.9%. Net loss rate is expected to improve given a resilient consumer, credit management actions, and continued risk and product mix shifts.
Zacks Rank
Bread Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Release
American Express Company (AXP - Free Report) reported third-quarter 2025 earnings per share (EPS) of $4.14, which beat the Zacks Consensus Estimate by 4.6%. The bottom line climbed 19% year over year. Total revenues, net of interest expense, amounted to $18.4 billion, which beat the Zacks Consensus Estimate by 2.4%. The top line improved 11% year over year in the quarter under review.
Network volumes of $479.2 billion rose 9% year over year in the third quarter, driven by higher U.S. consumer spending. The figure beat the Zacks Consensus Estimate by 1.2%. Total interest income of $6.6 billion increased 8% year over year and surpassed the consensus mark by 3.4%. Provision for credit losses fell 5% year over year to $1.3 billion, benefiting from lower reserve build.
Moody's Corporation (MCO - Free Report) has reported third-quarter 2025 adjusted earnings of $3.92 per share, which outpaced the Zacks Consensus Estimate of $3.70. The bottom line grew 22.1% from the year-ago quarter. After considering certain non-recurring items, net income attributable to Moody's was $646 million or $3.60 per share, up from $534 million or $2.93 per share in the prior-year quarter.
Revenues were $2.01 billion, which surpassed the Zacks Consensus Estimate of $1.96 billion. Also, the top line rose 10.7% year over year. Total expenses were $1.09 billion, up 1.4% year over year. Adjusted operating income of $1.06 billion rose 22.5% year over year. The adjusted operating margin was 52.9%, rising from 47.8% a year ago.
Synchrony Financial (SYF - Free Report) reported third-quarter 2025 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 28.8%. The bottom line gained 47.4% year over year. Net interest income was $4.7 billion, which grew 2.4% year over year. It surpassed the consensus mark by 0.6%. Retailer share arrangements of Synchrony advanced 12% year over year to $1 billion in the quarter under review.
Total deposits dipped 2% year over year to $79.9 billion and fell short of our estimate of $83 billion. Provision for credit losses was $1.1 billion, which tumbled 28.2% year over year on the back of a reserve release. The metric came in lower than our estimate of $1.5 billion.