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Fifth Third (FITB) Q2 Earnings Up on Higher Revenues

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Have you been eager to see how Fifth Third Bancorp (FITB - Free Report) performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this Ohio-based bank’s earnings release this morning:

Earnings up Y/Y

Fifth Third came out with earnings per share of 40 cents (including certain one-time items), up from 36 cents in the prior year quarter. Excluding one-time items, earnings per share would have been 41 cents for the reported quarter. The Zacks Consensus Estimate was 37 cents.  

Results were aided increased revenues, partially offset by higher provisions and expenses.

How Was the Estimate Revision Trend?

You should note that the earnings estimate for Fifth Third was stable prior to the earnings release. The Zacks Consensus Estimate remained unchanged at 37 cents over the last 7 days.

Notably, Fifth Third has a decent earnings surprise history.

FIFTH THIRD BK Price and EPS Surprise

FIFTH THIRD BK Price and EPS Surprise | FIFTH THIRD BK Quote

 

Revenue Came In Slightly Below Than Expected


Fifth Third posted revenues of $1.51 billion, slightly below the Zacks Consensus Estimate of $1.52 billion. However, revenues improved 4% year over year.

Key Stats:

Net income available to common shareholders increased 6% year over year to $310 million.

Provision for loan and lease losses increased 15% year over year to $91 million.

Total non-interest expense increased 4% year over year to $983 million.

Return on average assets improved to 0.94% in the second-quarter 2016 from 0.90% in the prior year quarter.

Greg D.Carmichael, President and CEO of Fifth Third Bancorp stated, “With a balanced focus on revenue growth and expense management we are making good progress even as we continue to make strategic investments.”  

He further added, “I am pleased to announce that we recently entered into a couple of significant transactions with Vantiv. We extended our processing agreement through 2024, which will generate revenue benefits and cost savings for Fifth Third. Additionally, we agreed to terminate and settle certain future TRA cash flows for an upfront payment of $116 million with the option to terminate and settle additional future cash flows. These agreements will enable us to repurchase shares using the realized gains, creating additional value for our shareholders.”

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Fifth Third. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. Now it all depends on what sense the just-released report makes to the analysts.

Check back later for our full write up on this Fifth Third earnings report!

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