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.