This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Capital One Easily Beats Wall St. Profit View

NEW YORK ( TheStreet) -- Capital One (COF - Get Report) rose in extended trading on Monday after the McLean, Va.-based bank trounced Wall Street's expectations for its fiscal third-quarter results.

The stock was last quoted at $39, up 4.8%, according to Nasdaq.com with volume running above 380,000. Based on the regular session close at $37.23, the shares were down a little less than 4% so far in 2010.

Capital One said it earned $803 million, or $1.76 a share, in the three months ended Sept. 30, up substantially from a year-ago equivalent profit of $394 million, or 87 cents a share, and well ahead of the average estimate of analysts polled by Thomson Reuters for earnings of $1.17 a share in the period.

Revenue rose 2.9% on a sequential basis to $4.02 billion, beating Wall Street's view of $3.8 billion. Capital One cited a slight improvement in net interest income as its margin ticked up to 7.21% from 7.09%, while non-interest income got a boost from a lower addition to the bank's representation and warranty reserves.

"Strong third quarter revenues, credit results, and profits continue to demonstrate our resilience in the face of ongoing economic and regulatory uncertainty," said Richard Fairbank, the company's chairman and CEO, in a press release. "We're well positioned to take advantage of emerging opportunities and deliver shareholder value over the long-term."

Capital One's huge credit card business contributed $631 million in net income during the quarter as purchase volumes ticked up $27.04 billion from $26.57 billion in the second quarter, and its delinquency rate improved to 4.69% from 4.94%.

The company also said it believes it's in good shape with regard to new higher capital requirements to be phased in for the industry over the next few years.

"Our tangible common equity ratio is higher than it was at the end of 2009, even with improving credit and a substantially higher loan loss allowance," said Gary Perlin, the company's CFO, in a statement. "We expect to reach currently defined Basel III levels and definitions in 2011, well ahead of the phase-in requirements."

Capital One is slated to hold its conference call before Tuesday's opening bell at 8:15 am ET.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

>To submit a news tip, send an email to: tips@thestreet.com
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
COF $78.65 0.05%
AAPL $123.38 0.50%
FB $95.29 1.19%
GOOG $628.00 0.12%
TSLA $264.82 4.67%

Markets

Chart of I:DJI
DOW 17,630.27 +189.68 1.09%
S&P 500 2,093.25 +25.61 1.24%
NASDAQ 5,089.2060 +49.43 0.98%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs