And in hindsight I should have. COF started out nice and low this morning, 26.4, but has climbed steadily since then, just under 30 now. And decent volume too. Why worry about a poor outlook from the CEO?
AXP nearly flat, why is COF rocketing?
Headlines
Capital One Financial Corp. (COF, $29.84, +$2.01, +7.22%) returned to profitability after two quarters of losses, but executives warned that delinquencies and loan losses won't improve any time soon. But the bank also repayed the funds from the Treasury Department's Troubled Asset Relief Program, and, including the charge related to the repayment and the dividend to the government, the bank posted a $276 million loss, or 65 cents per share.
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Also after the close Thursday, card rival Capital One Financial Corp. (COF) reported a second-quarter loss of $276 million, or 65 cents a share. That compares with a profit of $453 million or $1.21 a share, in the same period a year earlier.
The quarterly loss included $461.7 million that Capital One paid to redeem a government preferred investment from the Troubled Asset Relief Program and a $38 million dividend payment on those securities.
Excluding those payments, Capital One said it would have shown a second-quarter profit of $224.2 million, or 53 cents a share. That was down more than 50% from a year earlier, when the company made $453 million or $1.21 a share.
And, after investors had time to digest Capital One's adjusted earnings, the firm's stock rose about 2.1% in Friday trading, recovering after having fallen as low as 4.2% after hours on Thursday.
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Capital One Financial
10:14 AM ET 7/24/09 | Briefing.com
RELATED QUOTES
1:19 PM ET 7/24/09
Symbol Last % Chg
COF 29.93 7.55%
Real time quote.
Capital One Financial (COF 28.31, +0.48) reported second quarter financial results after the close yesterday, beating both earnings and revenue estimates.
The company reported a second quarter loss of $0.65 per share, which included TARP charges and was $0.08 better than the First Call consensus of a loss of $0.73. Revenue rose 1.4% year-over-year to $4.15 billion, which handily beat expectations of $3.88 billion.
Tangible common equity to tangible managed assets, or TCE ratio, increased to 5.7%, up 90 bps from the March 31, 2009, ratio of 4.8%. Provision expense was down $228.1 million quarter-over-quarter as the expected increase in charge-offs in the second quarter was more than offset by the $166.2 million allowance release in the quarter vs. an increase in allowance of $124.1 million in the first quarter.
In other metrics, the managed net charge-off rate for the National Lending segment increased 49 bps in the second quarter of 2009 to 8.04% from 7.55% in the first quarter of 2009. U.S. Card charge off increased 84 bps to 9.23%.
Separately, total company delinquency rate for the segment was 5.82% as of June 30, 2009, an increase of 12 bps from 5.70% as of March 31, 2009. For U.S. cards, delinquencies declined 31 bps to 4.77%. |
