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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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Decline And Slowdown Are Key Market Concepts – Use Them To Your Advantage (NASDAQ:TLT)

Decline And Slowdown Are Key Market Concepts – Use Them To Your Advantage (NASDAQ:TLT)

In the 2010 decade there have been three distinct business cycles based on several indicators such as growth in manufacturing employment, heavy truck sales, credit spreads, or purchasing managers surveys. The three cycles spanned 2009-2013, 2013-2016, and 2016-2020.

Their pattern is important because they had an impact on several asset prices. The last business cycle – the one going from 2016 to 2020 – provides, for instance, imported lessons on how long-dated Treasury yields behave.

HEAVY TRUCK SALESSome investors focus on the direction of the economy. Is it going up or down? What happened between 2016 and 2020 should help to recognize the power of small changes in the growth of business activity on investment timing.

In 2019 Wall Street agreed the economy was expanding and bond prices were extremely overbought. Yields had to move higher and prices lower. Several major strategists embraced this view.

YIELDS ON 10-YEAR TREASURY BONDSWall Street did not recognize business activity was already in the midst of a slowdown which started in mid-2018. Yields on 10-year Treasury bonds had bottomed in 2016 at around 1.4% and then rose until they peaked at 3.0% in 2018 as growth in business activity was rising. They began to decline in 2018 as the economy slowed down to finish at about 1.4% in 2019.

These levels were excessively low – or so Wall Street kept saying at that time. They could not go much lower given the economic expansion. Analysts repeated bonds were overbought and yields had to rise because the economy was still growing and the easy monetary policy of the Fed implied only one outcome – rising inflation.

Of course, rising inflation would have been the kiss of death for bonds. Hence the conclusion yields had only one way to go – sharply higher. Instead yields kept trading around 1.4% (pre-pandemic) to fall

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IMF Projects Less Severe Global Economic Decline for 2020, Slower Growth for 2021 | Best Countries

IMF Projects Less Severe Global Economic Decline for 2020, Slower Growth for 2021 | Best Countries

The International Monetary Fund announced on Tuesday new economic projections that mix both slightly better news for the short term and not-so-good news for the long term, as the coronavirus pandemic continues to hinder global growth.

The organization’s latest World Economic Outlook projects a global decline of 4.4% in 2020 – painting a rosier picture compared to its last update in June, when a 4.9% contraction was projected. The improved forecast reflects both better-than-expected second quarters – mostly for advanced economies – and indicators of strong recovery in the third quarter, according to the report.

A return to growth among advanced economies and China helped drive the revisions, the report notes. Chinese officials said on Tuesday that the country’s growth in exports accelerated in September, buoyed by a global demand for masks and medical supplies.

But the IMF also again downgraded its global outlook for 2021, projecting growth of just 5.2%. The organization in June projected growth of 5.4%, which represented a decline of 0.4% from its previous update in April. The continued downgrades represent the expectation that social distancing will continue into next year, according to the report. The current projections would leave gross domestic product in 2021 about 6.7 percentage points lower than the IMF’s pre-pandemic projections from January, and the level of global GDP next year is now expected to be a “modest” 0.6% above that of 2019.

The IMF also cautions that because of the nature of the pandemic, the outlook of the global economy is hard to put a finger on. The possibility of worse outcomes than expected “remains sizable.”

“The uncertainty surrounding the baseline projection is unusually large,” the report reads. “The forecast rests on public health and economic factors that are inherently difficult to predict.” That uncertainty also comes as the

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Earnings Preview: FB Financial (FBK) Q3 Earnings Expected to Decline

Earnings Preview: FB Financial (FBK) Q3 Earnings Expected to Decline

FB Financial (FBK) is expected 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 gives a good sense of the company’s earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

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

Zacks Consensus Estimate

This bank holding company is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of -53.3%.

Revenues are expected to be $135.80 million, up 40.8% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 2.43% 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 an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

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 Zacks Consensus Estimate for the quarter; the

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Analysts Estimate Enterprise Financial Services (EFSC) to Report a Decline in Earnings: What to Look Out for

Analysts Estimate Enterprise Financial Services (EFSC) to Report a Decline in Earnings: What to Look Out for

Wall Street expects a year-over-year decline in earnings on higher revenues when Enterprise Financial Services (EFSC) reports results for the quarter ended September 2020. While this widely-known consensus outlook is important in gauging the company’s earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The earnings report might help the stock move higher if these key numbers are better than expectations. 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 $0.91 per share in its upcoming report, which represents a year-over-year change of -16.5%.

Revenues are expected to be $78.93 million, up 3% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. 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 an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

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. Our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction) — has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks

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