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PNC Financial (PNC) Q3 Earnings Beat, Provisions Decline

PNC Financial (PNC) Q3 Earnings Beat, Provisions Decline

PNC Financial PNC pulled off third-quarter 2020 positive earnings surprise of 62% on prudent expense management. Earnings per share of $3.39 surpassed the Zacks Consensus Estimate of $2.09. Also, the figure was 15% higher than the prior-year level.

Shares of PNC Financial gained 1.5% in pre-market trading as investors reacted positively to the decline in expenses and lower provisions. A full day’s trading session will depict a better picture.

Moreover, decent fee income aided revenue growth. However, a lower net interest margin and decrease in loans were undermining factors.

Segment-wise, quarterly net income in Corporate & Institutional Banking and Retail banking climbed 4% and 53%, year over year, respectively. Further, the Other segment reported a 69% rise in net income, while the Asset Management Group segment registered a whopping 98% growth.

Fee Income Aids Revenues, Loans Decline, Expenses Fall

Total revenues for the reported quarter came in at $4.28 billion, up 1% year over year. The top line surpassed the Zacks Consensus Estimate of $3.97 billion.

Net interest income declined 1% from the year-ago quarter to $2.48 billion. The fall is attributable to lower yields on earning assets, partially offset by lower rates on deposits and borrowings and higher average earning assets. However, the net interest margin contracted 45 basis points to 2.39% due to lower yields on earning assets, partially muted by lower funding costs.

Non-interest income was up 3% year over year to $1.8 billion on higher asset management, corporate services, residential mortgage and other income. This was partially muted by lower income from consumer services and service charges on deposits.

PNC Financial’s non-interest expenses totaled $2.53 billion, down 4% from the year-ago figure. This decline primarily resulted from the fall in marketing and other costs, partly offset by higher personnel expenses.

Efficiency ratio was 59% compared with

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Fulton Financial (FULT) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

Fulton Financial (FULT) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

The market expects Fulton Financial (FULT) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2020. This widely-known consensus outlook is important in assessing the company’s earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 20. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management’s discussion of business conditions on the earnings call, it’s worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This financial holding company is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of -48.7%.

Revenues are expected to be $217.30 million, down 3.1% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 50% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the

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Regions Financial (RF) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

Regions Financial (RF) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

The market expects Regions Financial (RF) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended September 2020. This widely-known consensus outlook is important in assessing the company’s earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 20. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management’s discussion of business conditions on the earnings call, it’s worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This holding company for Regions Bank is expected to post quarterly earnings of $0.34 per share in its upcoming report, which represents a year-over-year change of -12.8%.

Revenues are expected to be $1.50 billion, up 0.2% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 5.21% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate

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Regions Financial Should Beat Earnings Consensus

Regions Financial Should Beat Earnings Consensus

Regions Financial (NYSE: RF), an Alabama-based bank with $144 billion in assets, is expected to have a much better third quarter than it did last quarter when the bank reported a $237 million loss, or negative $0.25 in earnings per share (EPS). The average estimate among 23 analysts for Regions’ Q3 earnings report (expected on Oct. 20), according to Yahoo! Finance, is $0.32 EPS. The consensus on Zacks Investment Research is $0.33 EPS among 11 analysts.

But I think this regional banking operation will be able to generate earnings toward the higher end of what analysts are projecting. Why? Because management has expressed confidence in its ability to continue paying its normal dividend. To do that under current regulations, it would have to do better than a $0.33 EPS.

Let me explain.

Stone and brick facade of a building with the word BANK on it

Image source: Getty Images.

The dividend calculation

Like it did in the third quarter, the Federal Reserve has capped dividends for larger banks to the average net income of the trailing four quarters. That means the bank’s ability to pay its normal dividend is heavily dependent on earnings.

Last quarter, Regions paid out a common dividend of roughly $149 million to shareholders ($0.155 per-share dividend times 960 million shares) and preferred dividends of $23 million, for a total quarterly dividend payment of $172 million. So, to cover this, the bank must have a trailing four-quarter average net income of $172 million or higher.

Quarter Net Income
Fourth-quarter 2019 $389 million
First-quarter 2020 $162 million
Second-quarter 2020 ($214 million)
Third-quarter 2020 (projected) $350 million
Average net income $171.75 million

Source: Regions Earnings Statements

Regions would have to generate roughly $350 million in net income to cover both the preferred and common dividends it paid in the second quarter, assuming outstanding shares stay the same at 960 million. The

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Holding Verizon Will Not Help You Beat The Market

Holding Verizon Will Not Help You Beat The Market

Verizon stock (NYSE: VZ) increased almost 7.5% in the last 3 months and currently trades at $59 per share. The rise was driven by the company’s increased focus on investing in 5G expansion and tie-up with Disney which has reduced the subscriber churn rate. But will the company’s stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last 20 years, returns for Verizon stock average only 0.2% in the next three-month (63 trading days) period after experiencing a 7.5% rise over the previous three-month (63 trading days) period. Notably, though, the stock is likely to underperform the S&P500 over the next three months (63 trading days), with an expected excess return of –1.3% compared to the S&P500.

But how would these numbers change if you are interested in holding Verizon stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test Verizon stock chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF Verizon stock moved by -5% over 5 trading days, THEN over the next 21 trading days, Verizon stock moves an average of 2.9 percent, which implies an excess return of 1.7 percent compared to the S&P500.

More importantly, there is 59%

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