High Costs & Provisions to Hurt Capital One's Q3 Earnings, NII to Aid

Core Viewpoint - Capital One (COF) is expected to report a year-over-year decrease in earnings for Q3 2024, while revenues are anticipated to increase [1][7]. Group 1: Earnings and Revenue Estimates - The Zacks Consensus Estimate for earnings is $3.70, reflecting a 16.9% decline from the prior year [7]. - The consensus estimate for sales is $9.79 billion, indicating a 4.5% increase [7]. Group 2: Performance Drivers - Net Interest Income (NII) is projected to grow by 4.9% to $7.78 billion, with the company's estimate at $7.69 billion [3]. - Total average earning assets are estimated at $452.7 billion, a 2.1% rise from the previous year [3]. - Interchange fees, which account for over 60% of fee income, are expected to increase by 4.4% to $1.29 billion [4]. - Total non-interest income is estimated to rise by 4.1% to $2.02 billion [4]. Group 3: Expenses and Asset Quality - Total non-interest expenses are expected to reach $5.04 billion, a year-over-year increase of 3.8% due to higher marketing costs and technology investments [5]. - Provision for credit losses is estimated at $2.87 billion, indicating a 25.5% increase from the previous year [5]. Group 4: Earnings Surprise History - Capital One has a mixed earnings surprise history, surpassing the Zacks Consensus Estimate in one quarter and lagging in three of the last four quarters [2].