Capital One Revenue Rises in Second Quarter
July 20 2017 - 5:41PM
Dow Jones News
By AnnaMaria Andriotis
Capital One Financial Corp. reported that its second-quarter
earnings rose 10% from a year prior, to $1.04 billion, beating
analyst estimates.
The credit-card issuer's shares jumped about 4% in aftermarket
trading.
The company reported earnings per share of $1.94. Analysts
polled by Thomson Reuters expected $1.90.
Capital One, which has large credit-card and auto-lending
divisions, reported total net revenue of $6.70 billion, up 7% from
a year prior. Analysts expected $6.67 billion.
Despite beating expectations, borrower performance remains a top
issue for the bank, which is known for its history as a large
subprime-credit-card lender. The company is a good indicator of the
general state of consumers' ability to repay their debts since,
unlike some other card issuers, it primarily doesn't focus on
extending credit to the affluent.
The bank wrote off more delinquent loans as losses and set more
money aside to cover for future losses. Both issues are being
closely watched by credit-card shareholders as concerns grow over
whether consumer credit is in the early stages of
deteriorating.
Its net charge-off rate for domestic credit cards was 5.11% for
the second quarter, down slightly from the first quarter, but up
1.04 percentage point from 4.07% the year prior.
Provisions for overall credit losses hit $1.8 billion in the
second quarter, down 10% from the prior quarter but up 13% from a
year prior.
From the first quarter, earnings rose 28%. In April, the company
reported first-quarter earnings that missed analyst estimates,
largely because of a 33% jump in provisions for loan losses in the
company's U.S. credit-card business from the previous quarter.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com
(END) Dow Jones Newswires
July 20, 2017 17:26 ET (21:26 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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