|
|
|
|
|||||
|
|
|
Shares of Capital One COF jumped 4.6% in after-hours trading following the announcement of better-than-expected third-quarter 2025 results and new capital distribution plans. Adjusted earnings of $5.95 per share widely surpassed the Zacks Consensus Estimate of $4.20. The bottom line also compared favorably with $5.48 in the prior quarter.
Results benefited from an increase in net interest income (NII) and non-interest income, and lower provisions. Also, higher loans and a stable deposit balance supported the performance. However, a rise in expenses was undermining the factor.
Results excluded several non-recurring items, including charges related to the Discover Financial acquisition. After considering these, net income available to common shareholders was $3.09 billion or $4.83 per share against a net loss of $4.34 billion or $8.58 per share in the last quarter.
Total net revenues were $15.36 billion, jumping 23% sequentially. Also, the top line beat the Zacks Consensus Estimate of $14.9 billion.
NII surged 24% from the prior quarter to $12.4 billion. NIM expanded 74 basis points (bps) to 8.36%.
Non-interest income of $2.96 billion grew 18%. The rise was driven by higher service charges and other customer-related fees, and discount and interchange fees, partially offset by a fall in other income.
Non-interest expenses were $8.26 billion, up 18%. The rise was due to an increase in almost all cost components except professional services. Adjusted expenses were $7.42 billion, jumping 16%.
The efficiency ratio was 53.8%, up from 53.07% in the last quarter. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Sept. 30, 2025, loans held for investment were $443.2 billion, up 1% from the prior-quarter end. Total deposits were $468.8 billion, relatively stable.
Provision for credit losses was $2.71 billion, a 76% fall from the prior quarter. Additionally, allowance, as a percentage of reported loans held for investment, was 5.21%, down 22 bps.
Further, the net charge-off rate declined 8 bps to 3.16%. On the other hand, the 30-plus-day-performing delinquency rate rose 16 bps sequentially to 3.29%.
As of Sept. 30, 2025, the Tier 1 risk-based capital ratio was 15.5%, up from 15.1% as of June 30, 2025. The common equity Tier 1 capital ratio was 14.4%, improving from 14%.
During the reported quarter, the company repurchased 4.6 million shares for $1 billion.
Additionally, COF’s board of directors authorized the repurchase of up to $16 billion of shares, which began on Oct. 21, 2025. This replaced the company’s previous buyback authorization.
Further, the company intends to raise its quarterly dividend by 33.3% to 80 cents per share, subject to approval by its board of directors.
Capital One’s strategic expansion efforts, decent demand for consumer loans, favorable changes in interest rates and steady improvement in the card business position it well for long-term growth. Moreover, the acquisition of Discover Financial has reshaped the landscape of the credit card industry, leading to the formation of a behemoth in the industry. However, elevated expenses and weak asset quality amid a tough macroeconomic backdrop are concerns.
Capital One Financial Corporation price-consensus-eps-surprise-chart | Capital One Financial Corporation Quote
Currently, Capital One carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ally Financial’s ALLY third-quarter 2025 adjusted earnings of $1.15 per share surpassed the Zacks Consensus Estimate of 99 cents. Further, the bottom line reflected a significant jump from the year-ago quarter.
Results primarily benefited from a rise in net finance revenues and lower provisions. Also, a marginal rally in loan balances supported ALLY’s results to some extent. However, a decline in other revenues and higher non-interest expenses were the undermining factors.
Navient NAVI is scheduled to announce third-quarter 2025 results on Oct. 29.
Over the past seven days, the Zacks Consensus Estimate for NAVI’s quarterly earnings has remained unchanged at 18 cents. This implies a 35.7% decrease from the prior-year quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).
| 1 hour | |
| 1 hour | |
| 2 hours | |
| 2 hours | |
| 3 hours |
Capital One Earnings Easily Beat. The Stock Is Flashing An Early Entry.
COF
Investor's Business Daily
|
| 3 hours | |
| 4 hours | |
| 4 hours | |
| 4 hours | |
| 4 hours | |
| 4 hours | |
| 5 hours | |
| 5 hours | |
| 6 hours | |
| 6 hours |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, backtesting, and much more.
Learn more about FINVIZ*Elite