Alliance Data Systems Inc. said Monday that the May net chargeoff rate in its master trust dropped 138 basis points from April but climbed 53 basis points from a year earlier, to 5.28%.

In a research note to clients Monday morning, Reginald Smith, an analyst at JPMorgan Chase & Co.'s securities unit, wrote that his earnings estimate of $4.30 a share for Alliance Data for this year is "safe in the face of a modest increase in chargeoffs, due to lower funding costs."

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