Capital One Cuts 2007 Profit Forecast on Loan Losses |
| Bloomberg - Jan 10, 2008 |
Capital One Financial Corp., the largest independent U.S. credit-card issuer, reduced its full- year profit forecast by about 20 percent because of swelling loan losses in a weakening U.S. economy. The company fell the most in two months in New York trading.
Capital One expects 2007 profit of $3.97 a share, down from a previous forecast of about $5. The decline was caused by $1.9 billion of loan-loss provisions and $80 million in legal reserves in the fourth quarter, the McLean, Virginia-based company said in a statement today.
Chief Executive Officer Richard Fairbank said last month that a slowing economy may cause bad debts to exceed $5 billion in 2008. Fallout from the collapse of the U.S. subprime mortgage market has led to more than $97 billion of writedowns and loan losses at the world's largest financial companies, eroding earnings and stock prices.
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- Posted: 2008-01-10 10:07:02
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