Capital One Trading Down Nearly 7 Percent on Missed Financial Results

Mclean-based Capital One Financial Corporation (NYSE: COF) released fourth quarter 2011 and full-year financial results after markets closed Thursday but disappointed investors with net income nearly cut in half compared to the third quarter of 2011.

Net income decreased by $406 million to $407 million or $0.88 centsper diluted common shareversus $813 million or $1.77per diluted common shareaccording to the credit card lender and bank.  In the fourth quarter of 2010 net income was $697 million, or $1.52per diluted common share. The company blamed the drop on an increase in non-interest expenses, omitted finance charge and fee reserve and insurance protection expenses in the UK.

Revenue was also down 2.5 percent or $104 million to $4.05 billion versus $4.15 billion in the third quarter 2011.

"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," stated 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."

Analyst estimated an average net income of $1.52per share and actual results were far below that. Revenue was also estimated to be higher at an average of $4.34 billion.  

Capital One expects to complete the acquisition of ING Direct and HSBC U.S. card businesses in the first and second quarters respectively.

Capital One shares were down -6.66 percent to $45.52 in late morning Friday trading. The stock is down from its 52 week high of $56.26.

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