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Capital One Q2 Profits Plunge 90%, Miss Forecasts

Increased bad loan reserves and acquisition costs hit earnings


Capital One Financial (NYSE:COF) reported that earnings for the second-quarter 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.

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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) U.S. credit card business, completed in May, and the $9 billion purchase of ING Direct from ING Groep (NYSE:ING), earlier in the year.

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

Article printed from InvestorPlace Media,

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