Capital One Financial Corp Earnings: Streak of Four Straight Profit Rises Snapped

S&P 500 (NYSE:SPY) component Capital One Financial Corporation (NYSE:COF) reported its results for the fourth quarter. Capital One Financial is a financial services company that markets a variety of financial products and services through its banking and non-banking subsidiaries.

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Capital One Financial Earnings Cheat Sheet for the Fourth Quarter.

Results: Net income for the credit services company fell to $407 million (88 cents per share) vs. $697 million ($1.52 per share) a year earlier. This is a decline of 41.6% from the year earlier quarter.

Revenue: Fell to $4.1 billion from $4.6 billion the year earlier quarter.

Actual vs. Wall St. Expectations: COF fell short of the mean analyst estimate of $1.53 per share. Analysts were expecting revenue of $4.1 billion.

Quoting Management: “In 2011, we made significant investments to restart growth across our lending businesses after a long period of cyclical declines in loan volumes, and we’re seeing these investments gain traction,” said Richard D. Fairbank, Capital One’s Chairman and Chief Executive Officer. “The strong underlying performance of our businesses and the compelling financial and strategic value of our planned acquisitions put us in a position to deliver and sustain shareholder value through growth potential, strong returns, and strong capital generation.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the third quarter, net income rose 1.2% from the year earlier, while the figure increased 49.8% in the second quarter, 59.7% in the first quarter and more than twofold in the fourth quarter of the last fiscal year.

Revenue has fallen in the past four quarters. Revenue declined 0.3% to $4.71 billion in the third quarter. The figure fell 2.3% in the second quarter from the year earlier and dropped 8.3% in the first quarter from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by 18 cents, and in the second quarter, it was ahead by 37 cents.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the first quarter of the next fiscal year has risen to $1.51 per share from $1.48. For the fiscal year, the average estimate has moved up from $7.39 a share to $7.55 over the last ninety days.

Competitors to Watch: American Express Company (NYSE:AXP), Discover Financial Services (NYSE:DFS), Citigroup Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp. (NYSE:BAC), Northern Trust Corporation (NASDAQ:NTRS), Wells Fargo & Company (NYSE:WFC), SLM Corporation (NYSE:SLM), Wilshire Bancorp, Inc. (NASDAQ:WIBC), and HSBC Holdings plc (NYSE:HBC).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com