Earnings Preview: Capital One

Apr.22.10 | About: Capital One (COF)

Capital One (NYSE:COF) is expected to report Q1 earnings after the close today with a conference call scheduled for 5 pm ET.

Guidance

Analysts are looking for EPS of 58c on revenue of $4.11B. The consensus range is 20c-95c for EPS and $3.89B-$4.31B for revenue, according to First Call. On April 15, Capital One announced that its U.S. net charge-off rate increased to 10.87% in March, compared with 10.19% in February. On a positive note, the company's 30 day delinquencies dropped to 5.30% from 5.51%.

Analyst Views

However, a CLSA analyst reacted to the data by downgrading Capital One to Underperform from Outperform. An RBC Capital analyst responded by writing that investors should be cautious about Capital One into its Q1 results. The firm maintained a Sector Perform rating on the stock. Meanwhile, Capitol One reported last month that it expected domestic charge-offs to peak in Q1. The company added that loans would continue to drop in 2010 due to continuing run off from businesses that are stopped or repositioned. Capital One added that it expects its 2010 net interest margin to be similar to be unchanged from 2009 levels.