Capital One, more financial bust du jour, a rather serious miss, time to slash staffs?
Associated Press
Capital One 4Q Profit Sinks 27 Percent
Wednesday January 19, 4:46 pm ET
Capital One Reports Fourth-Quarter Profit Sinks 27 Percent As Higher Expenses Cut Into Revenue
MCLEAN, Va. (AP) -- Capital One Financial Corp. said Wednesday that fourth-quarter profit fell 27 percent as increased expenses offset higher revenue.
The banking company earned $195.1 million, or 77 cents per share, down from $265.7 million, or $1.11 per share, a year ago.
Revenue rose 10 percent to $2.31 billion from $2.1 billion. Net interest income rose 18 percent to $784.6 million and non-interest income increased 6 percent to $1.52 billion.
Analysts expected earnings of 99 cents per share on sales of $2.76 billion.
Capital One said lower earnings were due to higher marketing costs from launching new programs and increased and provision expenses. Fourth-quarter marketing expenses increased 76 percent to $511.1 million from $290.1 million.
For the year, profit increased 36 percent to $1.54 billion, or $6.21 per share, from $1.14 billion, or $4.92 per share, in 2003. Net interest income rose 8 percent to $3 billion from $2.79 billion and non-interest income increased 9 percent to $5.9 billion from $5.42 billion.
Analysts were looking for profit of $6.44 per share for the latest quarter.
Marketing expenses for 2004 were $1.3 billion, a 20 percent increase over the $1.1 billion in 2003.
Capital One said it continues to expect earnings for 2005 to range from $6.60 to $7 a share, in line with current analysts estimates of $6.96 per share. The company said it expects marketing expenses in 2005 to be similar to 2004.
Shares fell 83 cents to close at $82.10 on the New York Stock Exchange and fell $2.90, or 3.5 percent, to $79.20 in the extended session recently. |
