Capital One posted drop in third-quarter profit and revenue
Capital One Financial Corp posted a decline in third-quarter profit, affected by loan-loss provision and a marginal drop in revenue. Earnings were consistent with what analysts had forecast, with revenue ahead of expectations.
Credit card lenders, such as Capital One, have started to perform better since the domestic economy recovered.
The company reported net earnings of $1.06 billion or $1.86 per share, slightly below last year’s earnings of $1.09 billion or $1.84 per share last year. Net margin for the quarter dropped by 20 basis points to 6.69 percent.
Revenue slipped during the quarter, down to $5.64 billion from $5.65 billion last year.
According to a poll by Thomson Reuters, analysts had predicted earnings of $1.94 per share for the quarter.
Credit card revenue dropped by 3 percent compared to the year before, consumer banking revenue also slipped, by 4 percent from last year. However, commercial banking revenue increased by 12 percent as did auto and commercial loans, which went up by 18 percent.
Credit losses in the quarter were $993 million, 17 percent higher than $849 million last year.
Capital One’s loans held for investments at the end of the quarter increased by 5 percent to $201.6 billion. The company has increased its loan portfolio by $2.6 billion.
Capital One closed on Thursday at $78.53, down by 0.86 percent. In after hours the stock fell by 2.46%, down to $76.60.