NEW YORK (
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
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
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.
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