Capital One (COF) blew past earnings projections, reporting $2.86 versus the consensus estimate of $2.06 per share. Despite the beat, the company kept its annual guidance steady at $7.40-$7.80 for 2006. Some investors were disappointed that Q1 was so strong but the company was seemingly being conservative about the year. When asked, management expressed that they saw things being tougher and uncertain later in the year, prompting them to reiterate their guidance rather than raise it.

Fast forward to last night and investors should be not shocked that Q2 earnings came in at $1.78 per share, shy of the $2.06 estimate. Despite the company's own guidance ($7.60), analysts were at $7.91 in EPS for the year heading into the report. The stock reacted by dropping $6 to $80 per share after last night's report. Given what we saw and heard in Q1, the earnings miss should not be as surprising as some seem to think. The stock's drop appears very overdone and I would suggest long term growth oriented investors pick up Capital One shares today at a sale price of $80, or 10 times earnings. Several years from now it will prove an excellent entry point, in my view.