What happened

Synchrony Financial (SYF 0.10%), a leading issuer of store credit cards and high-yield savings accounts, released its fourth-quarter and year-end 2019 results on Friday morning, and it appears the market wasn't too impressed with the results.

At first glance, the results look rather strong. Earnings increased year over year in the fourth quarter, despite most analysts expecting a drop due to the loss of the Walmart (WMT 0.98%) store card portfolio and general falling-rate environment. Plus, Synchrony and Verizon (VZ -0.90%) announced a deal to offer a new credit card product, Synchrony's charge-off rate declined, and deposits in the company's banking division grew by $1.1 billion from last year.

Two young women paying for purchases with a credit card.

Image source: Getty Images.

So what

Despite all of the positive aspects, there are a few things from Synchrony's report that appear to be frightening investors.

For one thing, Synchrony's revenue took more of a hit than analysts had hoped for. The bank's revenue of $3.1 billion for the fourth quarter was about $340 million less than a year ago and less than the $3.15 billion analysts had projected. The Walmart portfolio sale was completed in October, and it appears to have had more of an effect than expected. Retail card receivables declined by 12% year over year, and net interest margins declined by more than a full percentage point to 15.01% -- the loss of the Walmart portfolio was specifically cited as a reason for both.

Now what

It appears that the loss of the Walmart partnership caused more of an impact than investors had hoped to see. This is a similar situation as when American Express (AXP 1.47%) lost its Costco (COST 1.57%) partnership a few years ago. The unanswered question is whether Synchrony will come back stronger than ever after refocusing their efforts elsewhere (like Amex did), or if this represents a long-lasting hit to the company's business.