Earnings Preview: Capital One Financial Corp. (NYSE: COF) Second Quarter 2010
Wednesday, July 21, 2021 7:13 PM

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Capital One Financial Corp. (NYSE: COF) is scheduled to release its second-quarter earnings after the closing bell on Thursday, July 22, 2010. Analysts, on average, expect the company to report earnings of 86 cents per share on revenue of $3.96 billion. In the year-ago quarter, the company posted a loss of 65 cents per share on revenue of $4.15 billion.

Capital One Financial Corporation operates as the bank holding company for the Capital One Bank (USA), National Association and Capital One, National Association, which provide various financial products and services to consumers, small businesses, and commercial clients in the United States, Canada, and the United Kingdom. The company operates in three segments: Credit Card, Commercial Banking and Consumer Banking.

In the preceding first quarter, the McLean, Virginia-based company swung to a profit of $636.26 million or $1.40 per share, compared with a loss of $172.25 million or $0.44 per share in the year-earlier quarter. Revenue surged to $4.29 billion from $2.88 billion recorded in the same quarter last year. Analysts, on average, expected the company to report earnings of 59 cents per share on revenue of $3.37 billion. The company said in April that losses on bad loans peaked in the first quarter. The company set aside $1.48 billion in the first quarter to cover bad loans, down from $2.13 billion in the same quarter last year, including loans on the bank's balance sheet and sold to investors through securitization.

The company stands to benefit from improving credit trends and a steady increase in consumer spending. Recently, the company announced that its net U.S. card charge-offs fell for a third-straight month in June. In a regulatory filing, Capital One Financial said that its charge-off rate dropped to $422.5 million, or 9.28 percent of total balances, in June, from $436.2 million, or 9.48 percent in May. The company also said its delinquency rate - those payments 30 or more days behind - fell slightly, from 4.8 percent in May to 4.79 percent in June. The total was the lowest reported by the credit-card lender this year. Although unemployment remains at elevated levels, it shouldn't continue to drive up the company's charge-offs as those who are jobless have already moved through the delinquency and charge-off phases.

Meanwhile, US consumer spending rose 0.2% in May after a flat reading in April, according to a report released last month by the Commerce Department.

Analysts likely will ask for more details on the impact of financial and credit card regulation. In April, the company had said that it will experience a modest decline in over limit fee revenue in the second quarter, due to the February 22nd implementation of Card Act regulations.

In terms of stock performance, shares of the company have gained nearly 2.65 percent since the beginning of the year.

Disclosure: Author doesn't own any of the stocks discussed here.

 

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