Capital One Financial revenue up in Q2, net income above past expectations – Earnings review

By Denny Jacob


Capital One Financial Corp. on Thursday reported a rise in revenue and net profit slightly above analysts’ expectations in the second quarter. Here’s what we looked at:


ADJUSTED EARNINGS: The bank holding company posted adjusted earnings of $4.96 per share versus $7.71 per share in the prior year period. Analysts polled by FactSet had expected adjusted earnings of $5.09 per share.


REVENUES: The Mclean, Va.-based company reported revenue of $8.23 billion, up from $7.37 billion a year ago. Analysts polled by FactSet expected $8.31 billion in revenue.


NET INCOME: Capital One reported net income of $2.03 billion, up from $3.54 billion a year earlier. Analysts polled by FactSet had expected net profit of $2.02 billion.


WHAT WE WATCHED:


RECESSION: Capital One did not comment on a recession in its second quarter results. The company noted that the provision for credit losses increased by $408 million to $1.1 billion in the second quarter compared to the first quarter.


COMMISSION REVENUES: Non-interest revenue in the second quarter was below analysts’ expectations. Capital One reported $1.72 billion in noninterest revenue, below analysts’ forecast of $1.75 billion.


MARKETING: Amid uncertain economic headwinds, Capital One has not slowed down on marketing. Marketing in the second quarter grew to $1 billion from $620 million a year earlier. The company’s marketing in the second quarter increased 9% from $918 million in the first quarter. Chief Executive Richard Fairbank said in the first quarter that the company had increased marketing to grow its big-spend franchise and drive the launch of Venture X.


Write to Denny Jacob at denny.jacob@wsj.com