Synchrony beats profit estimates on solid spending, higher interest income

• Synchrony lifted the lower end of its full-year profit forecast after the strong quarterly report.
• On a per-share basis, Synchrony now expects 2026 profit in the range $9.25 to $9.50 versus $9.10 to $9.50, it had forecast earlier.

July 21 (Reuters) - Synchrony Financial reported a second-quarter profit that topped Wall Street expectations on Tuesday, as healthy consumer spending and borrowing boosted interest income at the credit card lender.

The U.S. labor market and economy have remained resilient, supporting consumer spending despite oil price shocks from the war in the Middle East and persistent inflation.

• Second-quarter purchase volume, a measure of consumer spending, increased 8% to $49.8 billion, Synchrony said.
• Net interest income, the difference between what the lender earns on loans and pays to fund them, climbed 2% year-over-year earlier to $4.61 billion.
• Net interest margin — a measure of lending profitability — expanded to 15.08% in the three months ended June 30 from 14.78% a year earlier.
• "Customer engagement remained strong as new accounts continued to grow, average active accounts inflected back to growth, and higher spend per account across each of our five sales platforms drove all-time high purchase volume for our business," CEO Brian Doubles said.
• The company reported a profit of $2.59 per share in the quarter. Analysts on average had expected $2.11 per share, according to estimates compiled by LSEG.