Friday, July 19, 2013

Capital One Financial (COF) Q2 Earnings

Capital One (COF) reported Q2 2013 financial earnings after the market closed on July 18th.  Earnings per share for the 2nd quarter increased to $1.87 from $1.79 in the 1st quarter, beating analysts’ consensus of $1.72. Net income increased 4% to $1.1 billion from $1.06 billion in the first quarter. Total revenue increased 2% to $5.6 billion from $5.5 billion while non-interest expense increased 1% to $3.1 billion from $3 billion.

Interest earning assets were down 2%, but interest-bearing liabilities decreased 3%. Net interest margin increased 12 bps to 6.83% and tier 1 common capital was reported at 12.1%, up 30 bps. Net charge-offs were down 15 bps to 4.28% and the delinquency rate was down 32 bps to 3.05%.  The provision expense dropped about 10% to $969 million, which helped to boost profits. Capital One delivered solid results across all business segments and generated significant capital during the quarter, positioning itself well to meet all regulatory requirements. Going forward management is looking to manage costs and maintain strong credit quality. Returning capital to shareholders is a strong focus, which will mainly be achieved by the $1 billion share buyback program. Shares were up after hours 2.31% to $68.60 after the earnings announcement.

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