Capital One Profit Rises But Lags Wall Street View

By Josh Beckerman 

Capital One Financial Corp. said its profit rose 9% in the second quarter as revenue ticked higher and operating expenses declined.

But results missed Wall Street estimates, pushing shares down 2.9% to $66.02 in after-hours trading Thursday.

Capital One, of the country's largest credit-card lenders, also offers traditional bank accounts, mortgages, auto loans and commercial loans.

In all, Capital One reported a profit of $942 million, or $1.69 a share, compared with $863 million, or $1.50 a share, a year earlier. Excluding items, earnings were $1.76 a share. Revenue improved to $6.25 billion from $5.67 billion.

Analysts polled by Thomson Reuters expected a per-share profit of $1.86 on revenue of $6.28 billion.

Noninterest expenses fell 0.4% to $3.3 billion.

Provision for credit losses increased to $1.59 billion from $1.13 billion.

DA Davidson upgraded Capital One earlier this month, saying credit risks have overly pressured the stock. "We acknowledge that we are in an extended positive credit cycle for credit cards, but we see no evidence of material deterioration in credit conditions," the investment bank said.

In June, shares of several credit-card companies declined when store-card specialist Synchrony Financial increased its forecast for credit losses over the next year.

At the end of June, Capital One announced a capital plan that included the repurchase of up to $2.5 billion of stock through the second quarter of 2017. The company said it intended to maintain its quarterly dividend of 40 cents.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

July 21, 2016 18:45 ET (22:45 GMT)

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