Capital One's ( COF) shares were dropping early Thursday after the lender cut its profit estimates, citing higher loss provision expenses and costs for additional legal reserves.

The company now expects to report earnings for the fourth quarter of about 60 cents a share and a profit for all of 2007 of around $3.97. Previously, Capital One had foreseen about $5 a share. Earnings from continuing operations for the quarter should be roughly 85 cents and for the full year approximately $6.55.

Analysts surveyed by Thomson Financial were looking for earnings of $1.52 for the fourth quarter and $4.86 for the year.

The fourth-quarter provision for loan losses was about $1.9 billion, made up of around $1.3 billion in charge-offs and an allowance increase of about $650 million.

Capital One said it ended 2007 with more than $29 billion in available liquidity. The company "believes that it remains well-positioned with respect to funding as a result of its more robust access to deposits, reduced reliance on wholesale funding markets, and strategy of holding significant liquidity."

Shares of Capital One were recently down 8% at $39.90.

This article was written by a staff member of TheStreet.com.

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