Capital One: First-Quarter Bounceback Winner (Update 1)

The credit card lender's stock rose more than 6% after the company reported strong first-quarter operating earnings growth.

Philip van Doorn

Apr 19, 2013 4:30 PM EDT

Updated with market close information and additional information on Capital One.

NEW YORK ( TheStreet) -- Capital One ( COF) was the big winner on Friday among the largest U.S. financial names, with shares rising over 6% to close at $56.17.

The Dow Jones Industrial Average ended with a slight gain, held back by General Electric ( GE), which dipped 4% to close at $21.75, after a disappointing first-quarter earnings report.

GE beat the consensus estimate among analysts polled by Thomson Reuters with a first-quarter profit of $4.1 billion, or 39 cents a share. However, the industrial giant reported weak revenues in most categories, with revenue in the Power & Gas segment down 26% year-over-year. First-quarter total industrial revenue was down 6% from a year earlier.

The S&P 500 ( SPX.X) and NASDAQ Composite indices ended with 1% gains, as investors continued to watch developments in Boston.

The KBW Bank Index ( I:BKX) was up 1.5% to close at 54.85, with all but two of the 24 index components ending the session with gains.

Shares of State Street ( STT) of Boston rose 1% to close at $56.93. The bank beat the first-quarter consensus with earnings of $443 million, or 96 cents a share, as revenue increases in several key areas more than offset a sharp sequential decline in net interest revenue. Please see TheStreet's earnings coverage for more on State Street's results.

Capital One

Capital One late on Thursday bounced back from a lousy fourth quarter, with a strong first-quarter earnings report.

The McLean, Va., credit card lender reported first-quarter net income of $1.1 billion, or $1.79 a share, compared to $843 million, or $1.41 a share in the fourth quarter, and $1.4 billion, or $2.72 a share, in the first quarter of 2012.

The year-earlier period included a $594 million bargain purchase gain from the acquisition of ING Direct (USA). Excluding that gain, first-quarter 2012 earnings were $809 million, or $1.56 a share, underscoring Capital One's success in the most recent quarter.

Capital One's net interest income increased to $4.570 billion in the first quarter from $4.528 billion in the fourth quarter and $3.414 billion in the first quarter of 2012. The year-over-year increase reflected the acquisition of HSBC's U.S. credit card portfolio in the second quarter of 2012.

Capital One's net interest margin -- the spread between the average yield on loans and investments and the average cost for deposits and borrowings -- expanded during the first quarter to 6.17% from 6.52% the previous quarter and 6.20% a year earlier.

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Capital One: First-Quarter Bounceback Winner (Update 1)

The credit card lender's stock rose more than 6% after the company reported strong first-quarter operating earnings growth.

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