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Last updated: October 17. 2013 5:37PM - 345 Views
Associated Press



A woman uses a Capital One Bank automated teller machine, July 18, 2013 in New York.  (AP Photo/Mark Lennihan)
A woman uses a Capital One Bank automated teller machine, July 18, 2013 in New York. (AP Photo/Mark Lennihan)
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(AP) Capital One Financial Corp.'s profit fell about 6 percent in the third quarter, as the lender booked higher operating expenses and its revenue declined versus the same period last year.


Still, the results exceeded Wall Street's expectations for the July-to-September period, boosting Capitol One's shares about 2 percent in after-market trading on Thursday.


While overall credit card purchase volume increased 6 percent from a year earlier, the McLean, Va.-based lender reported a 6 percent drop in revenue at its credit card segment. Revenue slipped 5 percent at Capital One's consumer banking business, but increased 9 percent at the company's commercial banking unit.


All told, Capital One's net interest income, or money earned from loans, dipped 2 percent to $4.56 billion in the quarter from $4.65 billion a year earlier. Non-interest income, which includes service charges and other customer-related fees, fell 4 percent to $1.09 billion from $1.14 billion.


Capital One is best known for its credit card business, but it has taken steps to increase its profile as a national bank in recent years. The acquisition of ING Direct, a deal that closed in February 2012, made Capital One the nation's sixth-biggest bank, based on deposits.


The gradually improving U.S. job picture could help boost consumer spending during the coming holiday season traditionally good news for card issuers. Between January and August, the most recent figures available, the economy added an average of 180,250 jobs a month. Unemployment, meanwhile, was 7.3 percent in August, down from 7.9 percent in January.


Capital One said that net income after paying preferred dividends was $1.1 billion, or $1.86 per share, for the three months ended Sept. 30. That compares with net income of $1.17 billion, or $2.01 per share, last year.


Analysts polled by FactSet, on average, expected earnings of $1.80 per share.


Total revenue slipped 2 percent to $5.65 billion from $5.78 billion. Analysts had forecast $5.58 billion.


Operating expenses climbed 7 percent to $2.65 billion.


Capital One shares ended regular trading down 10 cents at $72.15. The stock added $1.35 to $73.50 in aftermarket trading following the third-quarter report.


Associated Press
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