Capital One Post-Earnings Reaction: Room for Both Longs and Shorts

| About: Capital One (COF)

Capital One (NYSE:COF) is due with Q1 results early this morning. Analysts polled by Thomson Reuters expect the company to report a profit of $1.55 per share on revenue of $3.88 billion.

COF is mixed with its post-earnings performance when we compare its extended-hours move to the follow-on regular session: Shares have widened in 8 of the 17 quarters we've tracked. In the near-term, the stock favors reversing direction between the sessions, doing so in the last four consecutive quarters.

This volatile post-earnings stock tends to limit or reverse its next-day move in both directions. Longs might find attractive entry points during dips.

The stock has responded to earnings news with a gain in six examples, building on that move three times, or 50% of the time. The stock has responded to earnings news with a decline 11 times, building on that move just four times, 36% of the time.

  • On Jan. 20, 2011, the stock fell 0.9% after reporting a Q4 earnings beat. Shares bounced back with a 4% gain the following day.
  • On Oct. 18, 2010, COF advanced 5.5% in after-hours trade after beating Q3 estimates. It narrowed its upside the following day, closing the Oct. 19 regular session up 4.1%.
  • On July 22, 2010, COF declined 3.1% in evening trade after beating EPS estimates but also coming in shy on revenue. The stock cut its downside slightly the next day, ending down 2.9%.
  • On April 22, 2010, the stock gained 5.6% after a Q1 beat. Shares were up a smaller 2.6% the next day.
  • On Jan. 21, 2010, COF shed 4.2% in after-hours action after reporting a year-over-year decline in earnings. The stock was punched lower the following day, ending down 12.1%.
  • On Oct. 22, 2009, the stock gained 7.3% in evening trading after an earnings beat. Shares rose by a slightly trimmer 6.8% the next day.
  • On July 23, 2009, COF shed 4.2% in evening trade despite reporting Q2 results ahead of Street estimates. The stock saw a sharp reversal the following day, closing the July 24 regular session with an 8% gain.
  • On April 21, 2009, COF declined 8.3% in after-hours trade after missing Street expectations. The stock cut its downside the following day, ending the April 21 regular session off 4.4%.
  • On Jan. 22, 2009, COF shed 8% in after-hours trade after reporting a loss on a decline in revenue. The stock dropped deeper in the red the next day, losing 11.9% by the closing bell on Jan. 23.
  • On Oct. 16, 2008, the stock slipped 0.7% in evening trading as sales miss though the company did swing to profit. The stock gained 3.1% the following day.
  • On July 17, 2008, COF fell 5% during evening trading after the company reported a sharp decline in profit vs. a year earlier. The stock recovered the next day and the issue closed up a slim 0.1%.
  • On April 17, 2008, the stock fell 0.5% in the extended-hours period after the company reported Q1 EPS below the year-ago period but above the Street view. The loss expanded to 3.1% by the close of trading the next day.
  • On Jan. 23, 2008, the stock gained 2.3% during evening trading despite COF reporting results below those seen a year earlier but above the Street view. The gain improved to 8% by the close of trading the following day.
  • On Oct. 18, 2007, COF dipped 1% after guiding for revenue below expectations. The stock turned deeper in the red in the Oct. 19 regular session, losing 5%.
  • On July 19, 2007, COF edged up 2.1% in night trade after beating Q2 EPS estimates but missing on sales. It also forecast FY EPS to beat Street views. Shares inched up further the next day, closing the regular session up 2.8%.
  • On April 19, 2007, COF shed 5.9% in after-hours when the company missed Q1 EPS estimates and lowered its FY EPS guidance below Street views. Shares, though, managed to trim losses and close down 5.8% the next day.
  • On January 18, 2007, COF inched up 1.5% in evening hours when the company reported Q4 results that were up vs. a year ago. Shares rose further the next day, ending the regular session up 4%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.