McLEAN, Va. (
Capital One Financial
is up more than 8% in the after-hours session on Thursday after beating Street estimates in its first-quarter earnings.
Provisions for loan losses also went down sharply in the first quarter.
Capital One's profits soared to $636 million, or $1.40 earnings per share, versus a Street consensus of 58 cents earnings per share.
In the fourth quarter of 2009, Capital One had reported profits of $375.6 million, or 83 cents earnings per share.
Revenues came in slightly lighter than the Street consensus, declining by $79.3 million, or 1.8%, to $4 billion. The Street had pegged revenues at $4.1 billion for the first quarter.
Capital One's CEO Richard Fairbank was optimistic with the big earnings beat. "We've demonstrated our resilience through the most challenging economic cycle we've seen in generations, and we believe that charge-offs in our consumer lending businesses likely peaked in the first quarter," the Capital One CEO said in the earnings release.
Provision expense decreased $368.6 million from the prior quarter, or 20%, driven by lower charge-offs. Total charge-offs in the quarter fell as improvements in the company's commercial, auto finance and retail banking businesses more than offset a slight increase in domestic card charge-offs.
"Capital One posted strong bottom-line results in the quarter, as modestly improved pre-provision earnings were bolstered by lower provision expenses," Capital One's CFO, Gary Perlin, stated in the earnings release.
Capital One was the big banking beat in Thursday's after-hours session, with
beating Street estimates by a much smaller margin.
-- Reported by Eric Rosenbaum in New York.
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