Capital One swings to a loss in Q1 as COVID-19 weighs on performance

Capital One Financial Corp. (NYSE: COF) released its quarterly financial results on Thursday that reported a loss for the credit card company in the first quarter. The banking company also missed Wall Street estimates for revenue in the recent quarter.

Following the release of the Q1 earnings report, Capital One dropped around 4% initially in extended trading on Thursday but recovered to settle around a 1% decline later on. In the regular session on Thursday, Capital One had climbed roughly 2% in the stock market.

Capital One’s Quarterly Revenue Declined By 2% In Q1

Capital One recorded its net loss at £1.05 billion in the first quarter that translates to £2.51 per share. In the same quarter last year, the bank holding company had printed £1.13 billion in profit (£2.32 per share).

On an adjusted basis, Capital one posted a £2.45 of loss per share in the recent quarter versus £2.35 of adjusted profit per share in the comparable quarter last year.

In terms of revenue, Capital One noted a 2% year over year decline in revenue at £5.83 billion in Q1.

According to FactSet, analysts had forecast the company to print £5.91 billion in revenue in the first quarter. Their estimate for GAAP earnings was capped at £1.91 per share.

CEO Richard D. Fairbank commented on the company’s financial report and said:

“In the first quarter, Capital One rapidly mobilized to respond to COVID-19 and the disruptions it is causing, with a focus on our associates, our customers, and our communities. We are well-positioned to navigate and manage through these uncertain times, and to emerge with strength on the other side.”

Other Prominent Figures In Capital One’s Q1 Earnings Reports

Other prominent figures in Capital One’s first-quarter earnings report include a 10% decline in total non-interest expense to £3.0 billion and a massive 198% increase in provision for credit losses to £4.37 billion. The company also highlighted a 17 basis points drop in its net interest margin in Q1 to 6.78%.

At the time of writing, Capital One is exchanging hands at £42 per share in the stock market that marks an around 50% decline in 2020 so far. Its performance in 2019, on the other hand, was reported largely upbeat with an annual gain of around 35%. In the past three weeks, the stock has recovered roughly 25%.

Capital One is currently valued at £19.50 billion and has a price to earnings ratio of 4.77.