Monday, June 16, 2008


Capital One (COF): The Consumer Goes To The Mattresses

The consumer is bled dry. That is the message from an earnings warning at Capital One (COF). Mortgage lending was getting bad, but the latest news is that auto and credit card lending are falling apart. According to The Wall Street Journal "Capital One is expected to announce today that it expects charge-offs of $5.9 billion in 2008, up from its October forecast of $4.9 billion to $5.5 billion, partly because of worsening economic indicators that include rising unemployment."(1)

WSJ May 15, 2008 : Capital One Financial Corp. saw net charge-offs in its U.S. card and international segments climb in April, as delinquencies dipped at the U.S. card unit but rose in the auto-finance and international businesses.

In a filing with the Securities and Exchange Commission, the credit-card issuer and bank said net charge-offs in the U.S. card segment — which includes the domestic credit-card business, small-business lending and installment-loan business — rose to 6.08% of average loans held for investment in April, up from 6.07% in March and 5.5% in February. (2)

June 16, 2008
Capital One Financial Corp. (NYSE: COF) reported today that the annualized charge off rate in May for its credit card portfolio was 6.28 percent, up from 6.08 percent in April. The lender reported the 30 day delinquency rate on its $67.9 billion card portfolio was 3.81 percent in May, down from 3.90 percent in April, according to a filing with the U.S. Securities and Exchange Commission. (3)

On Thursday, July 17, 2008, at approximately 4:05 p.m. Eastern time, Capital One Financial Corporation (NYSE:COF) will release its second quarter 2008 earnings results. Additionally, the company will host a conference call at 5:00 p.m. Eastern time to review its financial and operating performance for the quarter ending June 30, 2008.

The call will be webcast live and the earnings release will be available on the company's homepage at A replay of the webcast will be available 24 hours a day, beginning 2 hours after the conference call, until 5:00 p.m. Eastern time on July 31, 2008, through the company's homepage. Capital One will also make an MP3 file available for download the next business day following the conference call.

Sources Cited

1 comment:

AX said...

More bad news from our favorite company to short. Hopefully their crappy results won't be washed away in the newfound LEH and GS celebrations. Cramer above my blog? Lies above truth. Very disappointed...