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Capital One Financial (COF) saw its profits dip in the third quarter as revenues from its flagship credit card business diminished.
October 17
Capital One Financial (COF) reported its lowest quarterly net income in a year on Thursday as margins shrunk in the company's flagship credit card business.
The McLean, Va., company earned $859 million in the fourth quarter, or $1.45 per share. That fell short of the $1.57 consensus among analysts surveyed by Bloomberg. Net income was down 23% from the third quarter, but up 1% from the same period a year earlier.
Capital One's net revenue fell 2% from the third quarter, and its net interest margin also decreased. At the same time, the company's provision for credit losses and its noninterest expenses both rose.
In a press release, Chief Executive Officer Richard Fairbank emphasized the company's financial performance over the last four quarters, saying that its yearlong results were "strong."
"We remain focused on resilient growth, disciplined cost management, and returning capital to shareholders in 2014," Fairbank said.
One bright spot in Capital One's fourth-quarter results was its loan volume. Domestic credit card loans, automobile loans and commercial loans outstanding all rose during the quarter. Home loans fell by 4%, but the company said that was the result of expected runoff in acquired portfolios.
Capital One's credit card business reported falling net interest income and net revenue. Its post-tax earnings were $516 million, which was well below the $694 million reported in the third quarter, and slightly below the $520 million reported in the fourth quarter of 2012.
