Capital One Q2 Earnings Preview: Increased Spending, Decline In Revenue Expected

Capital One Q2 Earnings Preview

Financial experts are predicting Capital One’s second-quarter earnings will fall below expectations, despite their moderate success in the first quarter.

The financial institution surpassed expectations last quarter. Its core card business and its commercial lending activity grew, leading to higher revenue numbers.

Higher interest rates and Capital One’s efforts to strengthen card operations will help the bank bolster earnings, but overall, analysts expect a decline in revenue for the second quarter, owing to only modest growth in fee income and net interest income, coupled with a rise in expenses.

One glaring expense was a significant increase in social media ad spending in the company’s efforts to find and attract new customers. Last year, Capital One spent $18.6 million on Facebook advertising alone, a sharp increase from the $2.8 million dedicated for the same purpose in 2017.

The company is also continuing to introduce new Capital One Cafes, like the three opened in Chicago, which each offer a full-service Peet’s Coffee as well as ATMs and “ambassadors” who are available to answer questions and provide assistance.

Capital One is also expanding its services for small and medium-sized businesses with its recent acquisition of BlueTarp, a B2B credit management company that services accounts receivable and aims to streamline the purchase-to-payment transaction.

Capital One will publish their second-quarter earnings report at 4:05 p.m. on Thursday (July 18) and will review the results in a conference call at 5 p.m.


Exclusive PYMNTS Study: 

The Future Of Unattended Retail Report: Vending As The New Contextual Commerce, a PYMNTS and USA Technologies collaboration, details the findings from a survey of 2,325 U.S. consumers about their experiences with shopping via unattended retail channels and their interest in using them going forward.