Discover Financial Services
On that basis, analysts had expected a loss of 14 cents per share, according to Reuters Estimates.
Discover cut its quarterly dividend to 2 cents per share from 6 cents to strengthen its capital base, a move that will save $80 million annually.
With default rates at the highest level in 20 years, credit card companies are the latest victims of a economic crisis that began with the collapse of the U.S. housing and subprime mortgage markets and spread around the world.
Discover's chargeoff rate -- the percentage of debt it does not expect to be repaid -- climbed to 6.48 percent from 5.48 in the fourth quarter. Its 30-day delinquency rate rose to 5.25 percent from 4.56 percent.
First-quarter net income was $120 million, or 25 cents per share, boosted by $297 million from an antitrust settlement with Visa Inc
The company set aside $707 million in the first quarter to cover credit losses as the recession deepens and unemployment soars.
Managed loans were flat at $51 billion, but Discover Card sales volume fell 8 percent to $21 billion.
Discover shares were unchanged at $7.24 in morning trading on the New York Stock Exchange. The stock has lost one-fourth of its value so far in 2009 and is down 50 percent in the last 12 months.
(Reporting by Juan Lagorio, editing by John Wallace)