Am-Ex and Capital One Both Beat and Both Disappoint (AXP, COF)

Capital One Financial Corp. (NYSE: COF) and American Express Company (NYSE: AXP) are historically about as similar of companies as they come.  Yet at the same time, they are about as different from each other as they could be as well.  We have received earnings from both lenders this afternoon.

Capital One posted a loss at -$0.65 EPS vs. estimates from Thomson Reuters of -$0.71 EPS.  The non-GAAP number with the TARP investment effect came was $0.53 EPS.  The company’s net charge-off rate for the quarter came in only at 1.1%.  The managed loans held for investment were down 2.7% and local bank revenues rose by more than 5%.  The charge-off rates you want to use is the one for credit card operations, and that came to 9,23% while the national lending charge-offs came to 8.04%.  The credit card delinquencies were listed at 4.77% and the national lending delinquencies came in at 5.82%.  Loan loss provisions were set at $934 million.  Tangible book value was listed as $25.34.

Am-Ex posted $0.27 EPS vs. $0.26 estimates from Thomson Reuters.  Earnings after items were $0.09 EPS.  Its consolidated loss provision was $1.6 billion versus a prior $1.8 billion and return on equity was 12%. Loss provisions were listed as $1.6 billion and losses on US cards was listed as $200 million. Its tier-1 risk based capital ratio was 9.6% and average ROE was about 13.2%.  Its company owned loan write-off rate was 10.3% and managed write-offs were 10%.  On a managed basis, Am-Ex sees this improving in the second half.

Capital One closed up 5% at $27.83, and its 52-week trading range is $7.80 to $63.50.  Its shares are trading down almost 2% at $27.15 in the after-hours market.  Its market cap at the close was $11 billion.

American Express closed up 2.4% at $29.45, and its 52-week range is $9.71 to $41.80.  Its shares are trading down almost 5% at $28.02 in after-hours trading.  Its market cap at the close was almost $34.4 billion.

There is one commonality here… profit taking.  After a 200%-plus recovery in Capital One shares and a near-200% recovery in Am-Ex shares, this is really of little to no surprise.

JON C. OGG