Capital One beats Q3 estimates as credit card revenue surges

NEW YORK – Capital One Financial Corporation (NYSE:COF) reported third quarter earnings that handily beat analyst expectations, driven by strong credit card revenue growth. The company’s stock jumped 3.2% in after-hours trading following the release.

The financial services giant posted adjusted earnings per share of $4.51, significantly above the $3.77 consensus estimate. Revenue came in at $10.01 billion, topping expectations of $9.87 billion.

Capital One’s credit card business was the star performer, with net revenue rising 9% year-over-year to $7.25 billion. The company saw domestic credit card purchase volume increase 5% to $162.3 billion.

“Strong third quarter results included top-line growth in our domestic card and auto businesses and stable consumer credit results,” said Richard D. Fairbank, Founder, Chairman and CEO.

Net interest income grew 7% to $8.08 billion, benefiting from higher interest rates. The net interest margin expanded to 7.11%, up from 6.69% a year ago.

Provision for credit losses fell 37% sequentially to $2.48 billion, signaling improving credit quality. The net charge-off rate declined to 3.27% from 3.36% in Q2.

Capital One maintained a strong capital position, with a Common Equity Tier 1 capital ratio of 13.6% as of quarter-end.

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