Capital One-NII & Fee Income to Aid COF's Q4 Earnings Amid Rising Provisions

Core Viewpoint - Capital One (COF) is expected to report an increase in quarterly earnings and revenues for Q4 and full-year 2024, with results influenced by net interest income growth and higher loans and deposits, despite rising expenses and lower non-interest income [1][2]. Financial Performance - The consensus estimate for total average earning assets is $459.5 billion, reflecting a 2.8% increase year-over-year, while the company's own estimate is$ 453.8 billion [5]. - The net interest income (NII) is projected to be $8.12 billion, indicating an 8% growth, with the company's estimate at$ 7.92 billion [6]. - Interchange fees, which account for over 60% of fee income, are expected to rise to $1.29 billion, a 5.9% increase, with the company's estimate at$ 1.31 billion [7]. - Service charges and other customer-related fees are estimated at $478.3 million, suggesting a 12.8% growth, while other non-interest income is expected to decline by 20.8% to$ 309.1 million [8]. Expenses and Provisions - Total non-interest expenses are estimated at $5.97 billion, reflecting a 4.4% year-over-year increase, driven by higher marketing costs and technology investments [10]. - The provision for credit losses is estimated at$ 2.77 billion, indicating a 3.2% decrease from the previous year [11]. Earnings Outlook - The Zacks Consensus Estimate for earnings is $2.66, revised slightly downward, indicating an 18.8% growth year-over-year, while sales are expected to reach$ 10.16 billion, a 6.9% increase [13]. - The Earnings ESP for Capital One is -2.71%, suggesting low chances of beating the consensus estimate [12]. Future Expectations - The company anticipates higher marketing investments in the second half of 2024 compared to the first half, with an expected operating efficiency ratio in the low 42% for 2024, down from 43.5% in 2023 [14].