Earnings Preview: Capital One

Jan.21.10 | About: Capital One (COF)

Capital One (NYSE:COF) is expected to report Q4 results Thursday after the market close with a conference call scheduled for 4:30 pm ET.

Guidance

Analysts are looking for EPS of 45c on revenue of $4.30B. The consensus range is 30c-60c for EPS and $4.14B-$4.45B for revenue, according to First Call. Capital One reported on January 15 that its 30-day delinquency ratio had fallen to 5.78% in December, from 5.87% in November. However, the credit card issuer's net charge-off rate rose to 10.14% last month, up from 9.04% in October. In statements made on December 9, Capital One CEO Richard Fairbank predicted that the company's chargeoff rates would peak this quarter, while consumer credit cards are still facing "elevated losses." Fairbank added that credit card companies are facing elevated regulatory risk this year as Congress considers new fee limits on credit card companies.

Analyst Views

Manwhile, two analysts had mixed outlooks on Capital One in recent days. A Ladenburg analyst downgraded the company's stock on January 13, citing valuation, credit metrics that would probably deteriorate further, and negative conseuqences arising from the credit card law passed last year.