Capital One Q2 Profits Plunge 90%, Miss Forecasts

by Christopher Freeburn | July 19, 2012 9:27 am

Capital One Q2 Profits Plunge 90%, Miss Forecasts

Capital One Financial (NYSE:COF[1]) reported that earnings for the second-quarter[2] plummeted 90% to $92 million, compared to $911 million during the same period last year. Second-quarter revenue, on the other hand, jumped 27% to $5.06 billion.

EPS for the quarter was 16 cents, compared to $1.97 last year.

The numbers disappointed Wall Street, which had been expecting EPS of $1.30 on revenues of $5.16 billion, The Wall Street Journal noted. Shares of Capital One slipped fractionally in pre-market trading on Thursday.

While the bank’s charge-offs for bad loans improved, it bucked the trend among other banks by raising its bad loan financial reserves from $343 million last year to $1.68 billion during the last quarter.

The bank is also still digesting a number of recent acquisitions, including the purchase of HSBC‘s (NYSE:HBC[3]) U.S. credit card business, completed in May, and the $9 billion purchase of ING Direct from ING Groep (NYSE:ING[4]), earlier in the year.

Over the last week, a number of banks, including Citigroup (NYSE:C[5]), JPMorgan Chase (NYSE:JPM[6]), Wells Fargo (NYSE:WFC[7]) and US Bancorp (NYSE:USB[8]), have reported second-quarter results that topped or met analysts estimates.

Endnotes:
  1. COF: http://studio-5.financialcontent.com/investplace/quote?Symbol=COF
  2. that earnings for the second-quarter: http://online.wsj.com/article/BT-CO-20120718-715765.html
  3. HBC: http://studio-5.financialcontent.com/investplace/quote?Symbol=HBC
  4. ING: http://studio-5.financialcontent.com/investplace/quote?Symbol=ING
  5. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  6. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  7. WFC: http://studio-5.financialcontent.com/investplace/quote?Symbol=WFC
  8. USB: http://studio-5.financialcontent.com/investplace/quote?Symbol=USB

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