Capital One Financial (NYSE:COF) Posts Earnings Results, Beats Estimates By $1.19 EPS

Key Points

• Capital One beat quarterly expectations: EPS came in at $6.69 versus the $5.50 consensus, while revenue reached $16.31 billion, slightly above estimates.
• Operating performance improved: Net income rose to $3.5 billion, non-interest expenses fell 2%, and net interest margin expanded to 8.41%; however, net charge-offs remained substantial at $3.1 billion and deposits declined.
• Shares gained 0.9% and the dividend remains intact: Capital One declared a quarterly dividend of $0.80, representing a 1.6% yield, while analysts maintain a consensus “Moderate Buy” rating with a $255.04 price target.

Capital One Financial (NYSE:COF - Get Free Report) released its quarterly earnings data on Tuesday. The financial services provider reported $6.69 EPS for the quarter, beating analysts' consensus estimates of $5.50 by $1.19, FiscalAI reports. The company had revenue of $16.31 billion during the quarter, compared to analyst estimates of $16.25 billion. Capital One Financial had a net margin of 13.37% and a return on equity of 11.28%.

Capital One Financial Trading Up 0.9%

Shares of NYSE COF traded up $1.82 during midday trading on Tuesday, reaching $201.65. 4,324,945 shares of the stock were exchanged, compared to its average volume of 4,630,098. Capital One Financial has a 52-week low of $174.24 and a 52-week high of $259.64. The stock has a 50 day moving average price of $207.70 and a 200-day moving average price of $200.51. The company has a market capitalization of $123.71 billion, a P/E ratio of 12.48, a P/E/G ratio of 0.97 and a beta of 1.04. The company has a current ratio of 1.02, a quick ratio of 1.02 and a debt-to-equity ratio of 0.39.

Capital One Financial Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Tuesday, September 1st. Stockholders of record on Monday, August 17th were given a $0.80 dividend. The ex-dividend date was Monday, August 17th. This represents a $3.20 annualized dividend and a dividend yield of 1.6%. Capital One Financial's dividend payout ratio is currently 19.80%.

Insider Activity

In other Capital One Financial news, insider Celia Karam sold 1,927 shares of the stock in a transaction on Thursday, October 15th. The shares were sold at an average price of $195.86, for a total transaction of $377,422.22. Following the transaction, the insider directly owned 55,774 shares in the company, valued at $10,923,895.64. This represents a 3.34% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Ravi Raghu sold 9,726 shares of Capital One Financial stock in a transaction dated Friday, July 31st. The shares were sold at an average price of $209.78, for a total transaction of $2,040,320.28. Following the sale, the insider owned 26,328 shares in the company, valued at approximately $5,523,087.84. This represents a 26.98% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 37,664 shares of company stock worth $7,914,162 over the last three months. 0.78% of the stock is currently owned by corporate insiders.

Wall Street Analyst Weigh In

A number of research firms recently weighed in on COF. Citigroup cut their target price on shares of Capital One Financial from $295.00 to $280.00 and set a "buy" rating for the company in a report on Tuesday, September 29th. Wall Street Zen lowered shares of Capital One Financial from a "buy" rating to a "hold" rating in a research report on Sunday, August 2nd. UBS Group raised their target price on Capital One Financial from $275.00 to $280.00 and gave the stock a "buy" rating in a report on Monday, August 3rd. Wolfe Research lifted their target price on shares of Capital One Financial from $255.00 to $275.00 and gave the company an "outperform" rating in a research report on Tuesday, August 25th. Finally, Weiss Ratings lowered shares of Capital One Financial from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Tuesday, October 6th. Twenty research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company's stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $255.04.

Key Capital One Financial News

Here are the key news stories impacting Capital One Financial this week:

• Positive Sentiment: Earnings beat expectations: Capital One reported quarterly EPS of $6.69, well above the $5.50 analyst consensus, while revenue reached $16.31 billion versus expectations of $16.25 billion. Net margin was 13.37% and return on equity was 11.28%. Capital One Financial quarterly earnings press release
• Positive Sentiment: Improving operating trends: Third-quarter net income rose to $3.5 billion from $3.0 billion in the prior quarter. Total non-interest expense declined 2% to $8.9 billion, net interest margin expanded 40 basis points to 8.41%, and loans held for investment increased to $462.5 billion. A $225 million loan-reserve release also helped results. Capital One Q3 net income report
• Neutral Sentiment: Credit and funding considerations: Provision for credit losses fell to $2.9 billion, but net charge-offs remained substantial at $3.1 billion. Deposits declined $3.6 billion to $480.7 billion, partially offsetting the stronger loan growth. Capital One’s common equity Tier 1 ratio remained solid at 13.8%.
• Negative Sentiment: Insider selling: Insiders Lia Dean and Celia Karam sold shares worth approximately $370,000 and $377,000, respectively. Both transactions were made under pre-arranged Rule 10b5-1 plans, reducing the signaling impact, but the sales may still weigh modestly on sentiment. Capital One insider trading report

About Capital One Financial

Capital One Financial Corporation is a diversified financial services company headquartered in McLean, Virginia. Founded in 1994, the company operates as a bank holding company through Capital One, N.A., providing financial products and services to consumers, small businesses and commercial customers.

Capital One is best known for its credit card business, which offers a range of consumer and business cards. Its other activities include consumer banking products such as checking and savings accounts, auto loans and retail banking services, as well as commercial banking services for businesses and institutions.

The company primarily serves customers in the United States through digital channels, branches and other distribution networks.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.