Synchrony Financial’s earnings took a hit as lower purchase volume and loan receivables hurt first-quarter results, but the credit card issuer still beat Wall Street’s expectations.
Revenue in the first three months of 2025 was $3.72 billion, in line with analysts’ average estimate, according to S&P. Earnings per share were $1.89, surpassing estimates of $1.72, per S&P.
Net income for the quarter was $757 million, beating analysts’ expectation of $667.2 million — but marking a nearly 42% drop from the same period last year. Excluding the $802 million impact of the Pets Best sale in the prior year, earnings would have been $491 million, or $1.18 a share, Synchrony said.
Purchase volume fell 4% from a year ago to $40.7 billion, while loan receivables decreased 2% to $99.6 billion.
“While the ongoing effects of our previous credit actions continued to impact purchase volume, active accounts and loan receivables growth, our net charge-off results outperformed historical seasonality,” Chief Financial Officer Brian Wenzel said in a press release Tuesday.
Net charge-offs grew 0.2% from a year ago to $1.59 billion. As a percentage of average loan receivables, net charge-offs were 6.38%, up from 6.31% a year ago.
The company maintained its net revenue outlook and forecasts the macroeconomic environment won’t deteriorate, nor will the tariff regime implemented by President Donald Trump affect consumer behavior. Synchrony narrowed its forecast range for net charge-offs to 5.8%-6% from 5.8%-6.1% previously, saying it expects the metric to generally follow seasonal trends in the second half and to see a positive impact from its “credit actions,” which it did not explain.
Provisions for credit losses fell about 21% from a year ago to $1.49 billion.
Synchrony’s interest and fees on loans were roughly flat from the year-ago period, rising only 0.4% to $5.3 billion. The company partly attributed this to “lower late fee incidence.”
This is the result of a long policy battle over late fees, drawn out by court battles and changing leadership in Washington. In March 2024, when Joe Biden was still president, the Consumer Financial Protection Bureau introduced a
The rule stood to cost credit card companies — and save consumers — about $10 billion per year, the CFPB
Synchrony worked fast to soften the blow. A month after the rule was announced, the company raised interest rates on its credit cards and added new fees to raise revenue in other areas.
But the rule never took effect. Trade groups representing banks and other businesses sued to block the regulation from being implemented, and in May 2024 they won a temporary injunction from a federal judge in Texas. Almost a year of court battles later, under new leadership appointed by President Donald Trump, the CFPB itself
With that limit on credit card late fees removed for good, a major source of income for Synchrony has been restored.
“As we look to the remainder of 2025 and beyond, Synchrony remains well positioned to navigate the evolving economic landscape while also driving progress toward our long-term financial targets,” Wenzel said Tuesday.
Synchrony increased its dividend by 20% to 30 cents a share. The increase is equivalent to an annual payout of $1.20 and represents a yield of 2.5% based on Monday’s closing price of $47.23.