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Q3 Credit Card Showdown: Capital One Vs. Discover Card

Capital One COF Vs. Discover Card DFS: Q3 Credit Card Showdown

With third-quarter earnings score cards from Capital One Financial Corp. (NYSE: COF) and Discover Financial Services (NYSE: DFS) due Tuesday after the closing bell, a brief look at what to expect from both these companies is fitting.

Wall Street pitches Capital One's earnings at $1.94 per share, down from $1.98 per share last year. However, revenues are estimated to have increased 8.80 percent to $6.42 billion.

At the same time, analysts on average expect Discover Financial to have earned $1.47 per share in the third quarter, up from $1.38 per share a year ago. The consensus estimate calls for revenues of $2.27 billion, down 3.80 percent year-over-year.

Barclays expects Capital One's third-quarter earnings to top the Street view, driven by higher net interest margin and balance sheet growth. The firm said it expects higher fee income, relatively stable expenses, higher NCOs and continued reserve build. Key items to watch include Cabelas Inc (NYSE: CAB)'s deal, comments on credit quality, expenses, digital initiatives, CCAR 2016 and loan growth, the firm said.

Now, how does that stack up against the others credit card companies that have reported already?

Those Already Reported

American Express Company (NYSE: AXP) reported better-than-expected third-quarter results and raised its earnings per share guidance for the full year.

Visa Inc (NYSE: V) reported upbeat earnings and revenues for its third quarter, as total payment volumes increased. The company's adjusted earnings of $1.20 per share for the third quarter handily beat estimates of $0.96. Sales of $4.261 billion also sneaked past estimates by a whisker.

More importantly, Visa predicted 2017 net revenue growth of 16–18 percent and mid-teens increase in adjusted, non-GAAP earnings on a nominal dollar basis. This was shy of the 19.60 percent revenue growth forecast by analysts, on average.

MasterCard Left To Report As Well

Rounding off the pack, Mastercard Inc (NYSE: MA), with earnings due Friday, is expected to report earnings per share growth of 6.6 percent to $0.97, with revenues estimated to be up 8.5 percent at $2.75 billion.

At Last Check ...

  • American Express was down 0.49 percent at $66.75.
  • Capital One Financial was up 0.09 percent at $75.47.
  • Discover Financial shares were down 1.05 percent at $55.82.
  • MasterCard shares were down 0.26 percent at 102.92.
  • Visa was pulling back 1.15 percent to $82.21.

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DateFirmActionFromTo
Oct 2016Bank of AmericaUpgradesUnderperformNeutral
Oct 2016NomuraDowngradesNeutralReduce
Jun 2016Goldman SachsMaintainsNeutral

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