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Finance Q2 Earnings to Watch This Week: AXP, COF, MCO, SLM
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The second-quarter season is in full swing. Last week, we saw results from 36 S&P 500 members that combined account for 10.1% of the index’s total market capitalization as per the Earnings Trends report. Revenues had decreased 0.1% and total earnings declined 3.9%. The beat ratio was 66.7% for the bottom line and 41.7% for the top line.
Coming to the Finance sector, we already have reports from 7.8% as per the Earnings Preview article. These companies saw total earnings decline of 5.4% and meager revenue growth of 0.4%.
Overall earnings for the Finance sector in second-quarter 2016 are expected to be down 3.3% year over year. Also, revenues are expected to be down 0.5%. Notably, during the first quarter, the sector had witnessed a 6.9% decline in earnings while revenues improved 3.3%.
Let’s see what factors might have influenced the finance sector performance in the second quarter.
A strong dollar will affect earnings of players having international exposure. Nonetheless, an upside in earnings is likely from an increase in consumer spending which is leading to higher card member spending. Also, strong credit card loan and overall growth in loans, including commercial and industrial, and commercial real estate loans, should drive the top line.
Then again, low interest rates will affect deposit business, and oil and gas loans will continue to pose challenges. Companies involved in oil and gas have been building reserves to reflect this concern.
As many as 299 companies will release results from Jul 18–22. Let’s find out what’s in store for the following the finance stocks that will report second-quarter earnings results this week.
Global electronic payment processor American Express Co. (AXP - Free Report) is scheduled to release second-quarter financial results after the closing bell on Jul 20. In the last reported quarter, the company beat the earnings estimate by 6.62%. It has an Earnings ESP of -0.52% and a Zacks Rank #3 (Hold).
American Express’ second-quarter results will see the impact of a stronger U.S. dollar. We also expect to see healthy loan growth and favorable credit performance. The bottom line will gain from a reduction in operating expenses as the estimated $1 billion gain on the Costco portfolio sale will be recorded as a benefit in operating expenses.
Earnings will, however, suffer from a higher level of investment spending and modest restructuring charge. Lower gas and airline ticket prices also remain headwinds to the Global Corporate segment and the U.S. consumer segment.
The company will also incur restructuring charges to reduce costs. A strong balance sheet will enable the company to return a substantial amount of capital to shareholders via share buyback, which in turn will lift its bottom line.
With respect to the surprise trend, American Express surpassed expectations in three out of the last four quarters, with an average beat of 4.23%. (Read more: American Express (AXP - Free Report) : Earnings Beat to Continue in Q2?)
Capital One Financial Corporation (COF - Free Report) is scheduled to report second-quarter 2016 results on Jul 21, after the market closes. In the last reported quarter, the company missed the earnings estimate by 2.63%. It has an Earnings ESP of -1.60% and a Zacks Rank #3.
Capital One expects pressure on the top line due to runoffs in home loans and sluggish auto loan growth. Further, provision for credit losses are expected to rise as Capital One’s credit quality will remain under pressure, given the stressed energy sector and consistent increase in loans.
Also, operating expenses should rise given an increase in marketing expenses and continued investments in franchise.
Nonetheless, projected growth in Domestic Card loan should continue to ease pressure on the top line to some extent. Further, Capital One’s revenues will likely benefit from growth in commercial loans.
Capital One missed earnings in two out of the last four quarters, with an average negative surprise of 1.22%. (Read more: Capital One (COF - Free Report) Q2 Earnings: Will the Stock Disappoint?)
Moody’s Corporation (MCO - Free Report) is scheduled to report second-quarter 2016 results on Jul 22. In the last reported quarter, the company missed the earnings estimate by 13.08%. It has an Earnings ESP of 8.87% and a Zacks Rank #3.
Moody’s earnings might face a burn from forex fluctuations and slowdown in debt issuance activity worldwide. Moody’s faces significant economic risks associated with the volatile macro environment and its effect on financial markets and soft bond issuance, which also results in sluggish demand for credit ratings. Management also slashed its 2016 forecast owing to not-so-conducive market conditions.
Nevertheless, earnings will see accretion from acquisitions and growth in areas outside the core credit ratings service for public fixed-income securities.
With respect to the surprise trend, Moody’s surpassed expectations in three out of the last four quarters, with an average beat of 0.51%. (Read more: Will Moody's Corp. (MCO - Free Report) Q2 Earnings Surpass Estimates?)
SLM Corporation (SLM - Free Report) is scheduled to report second-quarter 2016 results on Jul 20. In the last reported quarter, the company beat the earnings estimate by 16.7%. It has an Earnings ESP of 0.00% and a Zacks Rank #3.
With respect to the surprise trend, SLM Corp. surpassed expectations in each of the last four quarters, with an average beat of 14.51%.
Stay tuned! Check back on our full write-up on earnings releases of these stocks.
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Finance Q2 Earnings to Watch This Week: AXP, COF, MCO, SLM
The second-quarter season is in full swing. Last week, we saw results from 36 S&P 500 members that combined account for 10.1% of the index’s total market capitalization as per the Earnings Trends report. Revenues had decreased 0.1% and total earnings declined 3.9%. The beat ratio was 66.7% for the bottom line and 41.7% for the top line.
Coming to the Finance sector, we already have reports from 7.8% as per the Earnings Preview article. These companies saw total earnings decline of 5.4% and meager revenue growth of 0.4%.
Overall earnings for the Finance sector in second-quarter 2016 are expected to be down 3.3% year over year. Also, revenues are expected to be down 0.5%. Notably, during the first quarter, the sector had witnessed a 6.9% decline in earnings while revenues improved 3.3%.
Let’s see what factors might have influenced the finance sector performance in the second quarter.
A strong dollar will affect earnings of players having international exposure. Nonetheless, an upside in earnings is likely from an increase in consumer spending which is leading to higher card member spending. Also, strong credit card loan and overall growth in loans, including commercial and industrial, and commercial real estate loans, should drive the top line.
Then again, low interest rates will affect deposit business, and oil and gas loans will continue to pose challenges. Companies involved in oil and gas have been building reserves to reflect this concern.
As many as 299 companies will release results from Jul 18–22. Let’s find out what’s in store for the following the finance stocks that will report second-quarter earnings results this week.
Global electronic payment processor American Express Co. (AXP - Free Report) is scheduled to release second-quarter financial results after the closing bell on Jul 20. In the last reported quarter, the company beat the earnings estimate by 6.62%. It has an Earnings ESP of -0.52% and a Zacks Rank #3 (Hold).
American Express’ second-quarter results will see the impact of a stronger U.S. dollar. We also expect to see healthy loan growth and favorable credit performance. The bottom line will gain from a reduction in operating expenses as the estimated $1 billion gain on the Costco portfolio sale will be recorded as a benefit in operating expenses.
Earnings will, however, suffer from a higher level of investment spending and modest restructuring charge. Lower gas and airline ticket prices also remain headwinds to the Global Corporate segment and the U.S. consumer segment.
The company will also incur restructuring charges to reduce costs. A strong balance sheet will enable the company to return a substantial amount of capital to shareholders via share buyback, which in turn will lift its bottom line.
With respect to the surprise trend, American Express surpassed expectations in three out of the last four quarters, with an average beat of 4.23%. (Read more: American Express (AXP - Free Report) : Earnings Beat to Continue in Q2?)
AMER EXPRESS CO Price and EPS Surprise
AMER EXPRESS CO Price and EPS Surprise | AMER EXPRESS CO Quote
Capital One Financial Corporation (COF - Free Report) is scheduled to report second-quarter 2016 results on Jul 21, after the market closes. In the last reported quarter, the company missed the earnings estimate by 2.63%. It has an Earnings ESP of -1.60% and a Zacks Rank #3.
Capital One expects pressure on the top line due to runoffs in home loans and sluggish auto loan growth. Further, provision for credit losses are expected to rise as Capital One’s credit quality will remain under pressure, given the stressed energy sector and consistent increase in loans.
Also, operating expenses should rise given an increase in marketing expenses and continued investments in franchise.
Nonetheless, projected growth in Domestic Card loan should continue to ease pressure on the top line to some extent. Further, Capital One’s revenues will likely benefit from growth in commercial loans.
Capital One missed earnings in two out of the last four quarters, with an average negative surprise of 1.22%. (Read more: Capital One (COF - Free Report) Q2 Earnings: Will the Stock Disappoint?)
CAPITAL ONE FIN Price and EPS Surprise
CAPITAL ONE FIN Price and EPS Surprise | CAPITAL ONE FIN Quote
Moody’s Corporation (MCO - Free Report) is scheduled to report second-quarter 2016 results on Jul 22. In the last reported quarter, the company missed the earnings estimate by 13.08%. It has an Earnings ESP of 8.87% and a Zacks Rank #3.
Moody’s earnings might face a burn from forex fluctuations and slowdown in debt issuance activity worldwide. Moody’s faces significant economic risks associated with the volatile macro environment and its effect on financial markets and soft bond issuance, which also results in sluggish demand for credit ratings. Management also slashed its 2016 forecast owing to not-so-conducive market conditions.
Nevertheless, earnings will see accretion from acquisitions and growth in areas outside the core credit ratings service for public fixed-income securities.
With respect to the surprise trend, Moody’s surpassed expectations in three out of the last four quarters, with an average beat of 0.51%. (Read more: Will Moody's Corp. (MCO - Free Report) Q2 Earnings Surpass Estimates?)
MOODYS CORP Price and EPS Surprise
MOODYS CORP Price and EPS Surprise | MOODYS CORP Quote
SLM Corporation (SLM - Free Report) is scheduled to report second-quarter 2016 results on Jul 20. In the last reported quarter, the company beat the earnings estimate by 16.7%. It has an Earnings ESP of 0.00% and a Zacks Rank #3.
With respect to the surprise trend, SLM Corp. surpassed expectations in each of the last four quarters, with an average beat of 14.51%.
SLM CORP Price and EPS Surprise
SLM CORP Price and EPS Surprise | SLM CORP Quote
Stay tuned! Check back on our full write-up on earnings releases of these stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>