Capital One Rises Most in More Than Two Years on Earnings Beat

  • Shares rise as much as 5.5%, the most since April 2013
  • Profit topped estimates on credit-card and auto-lending gains

Capital One Financial Corp. surged the most in more than two years after posting profit that beat analysts’ estimates as credit-card and auto lending increased.

Shares of the bank rose 5.2 percent to $78.87 at 9:40 a.m. in New York trading after reaching $79.09, the biggest gain since April 2013. They had declined 9.2 percent this year through Thursday, compared with the 3.5 percent drop of the 88-company Standard & Poor’s 500 Financials Index.

Third-quarter net income advanced 3.1 percent to $1.11 billion, or $1.98 a share, the McLean, Virginia-based company said Thursday in a statement. Adjusted profit, which excludes some one-time items, was $2.10 a share, exceeding the $1.94 estimate of analysts surveyed by Bloomberg. Revenue also topped estimates, climbing 4.6 percent to $5.9 billion.

“Investors are becoming more comfortable with the company’s investments in growth initiatives and have more confidence in sustainable loan growth," Jim Shanahan, an Edward Jones & Co. analyst, said Thursday in a note to clients.

Chief Executive Officer Richard Fairbank has sought to diversify the bank’s offerings beyond its core credit-card lending business. The company agreed in August to buy General Electric Co.’s health-care finance business for about $9 billion. That deal is expected to be completed by year-end, Fairbank, 65, said Thursday on a conference call.

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