AmEx and Capital One disappoint Wall Street

CREDIT card firms Capital One Financial and American Express both reported disappointing fourth quarter results last night.

Capital One said net income for the fourth quarter rose to $843m (£527m), or $1.41 per share, from $407m, or 88 cents per share, a year earlier. The result was lower than average analyst expectations of $1.58 earnings per share.

Total net revenue came in at $5.62bn, with the firm saying it expected similar revenue for the first quarter, again disappointing analysts who had forecast $5.71bn. Capital One said it had been forced to set aside $1.15bn to cover bad loans in the fourth quarter, up 13.5 per cent from the third quarter. Its shares plunged seven per cent in after-hours trading.

Meanwhile, American Express reported net income 47 per cent lower in the fourth quarter, due to hefty charges related to restructuring costs and other one-time expenses.

The firm, which last week announced 5,400 job cuts, posted net income of $637m, or 56 cents per share, for the three months to the end of December. That compares with net income of $1.2bn, or $1.01 per share, in the same period last year.