The cracks are reappearing in the Capital One ( COF) story. For the past two years, Capital One has done a fair job of proving its critics, including this column, wrong. The racy credit card lender managed to post a whopping 34% increase in earnings in 2004, and its stock is up a massive 160% from February 2003, giving the company a current market worth of $19 billion. The huge amounts spent on sports sponsorship, TV advertising and other forms of marketing could even give the impression that Capital One has now established itself as a permanent heavyweight in the U.S. financial services industry. But anyone taking an honest look at Capital One's fourth-quarter earnings would see that its growth-at-all-costs strategy never went away and is starting to come undone. Capital One has managed to do well since 2001 because it's been taking full advantage of the easiest credit environment in U.S. history. Now, as the advantages of that easy-money boom dissipate, the company's shortcomings are becoming sorely apparent. Tuesday, Capital One stock fell $1.22 to $77.32. A company spokeswoman didn't respond to a call requesting comment. At its current price, Capital One trades at 11.2 times the $6.92 that analysts expect in earnings for 2005. That doesn't look at all expensive, meaning that earnings disappointments might not cause the stock to collapse. Even though the fourth quarter's 77 cents in per-share earnings were well below the consensus estimate of 99 cents, and even though the earnings got a dubious boost from a substantially lower tax rate, the stock didn't totally crater. Instead, it slid 6.5% in the three days following the Jan. 19 earnings release, and then rose. However, the fourth-quarter numbers suggest it will be hard for Capital One to earn the $6.92 that Wall Street expects this year. As a result, if the company ended up making, say, $5.50 instead, it would be trading at 14 times earnings, which is a pricey multiple for a company as unpredictable as Capital One.