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What to Expect When U.S. Bancorp (USB) Reports Q1 Earnings?
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U.S. Bancorp (USB - Free Report) is scheduled to report first-quarter 2017 results on Apr 19, before the opening bell.
The company’s fourth-quarter 2016 earnings surpassed the Zacks Consensus Estimate, aided by growth in net interest income and non-interest income. Further, the quarter recorded a rise in loan and deposit balances. However, on the down side, the quarter witnessed escalated expenses and higher credit costs.
Notably, U.S. Bancorp delivered positive earnings surprises in three of the four trailing quarters, with an average beat of 1.26%.
Regarding the stock’s performance, shares of the company gained 16.2% over the past six months, underperforming growth of 22.0% recorded by the Zacks categorized Banks – Major Regional industry.
Will the upcoming earnings release give a boost to U.S. Bancorp’s stock? This depends largely on whether the firm is able to post a beat in the first quarter. However, our quantitative model doesn’t conclusively point toward an earnings beat this time. Here’s why.
U.S. Bancorp doesn’t have the right combination of the two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) – for increasing its chances of an earnings beat. Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Zacks ESP:The Earnings ESP for U.S. Bancorp is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 80 cents. This is a major indicator of a likely positive earnings surprise for the company. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S. Bancorp’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
Factors to Influence Q1 Results
Expenses to Trend Higher: Expenses might trend upward in the upcoming release due to the increase in FDIC surcharge, which went effective in third-quarter 2016. However, management anticipates expenses to decline slightly on a sequential basis, mainly driven by seasonally lower professional fees and a decline in tax credit amortization expense, resulting in a relatively stable efficiency ratio.
Pressure on Net Interest Margin to Ease Slightly: Though the prolonged low-rate environment has taken a toll on the bank’s margins for the past several quarters, the Fed’s recent rate hike for the third time since the financial crisis, and its commitment to raise rates faster (two more times) this year, based on a convincing pace of economic growth, should help banks get rid of shrinking margins.
Top-line Growth: Management remains optimistic that an improving economy will spur consumer activity, which will help both payments businesses and consumer lending businesses. An improved economic backdrop should also lead to a rise in business spending on development and capital investments. Further, mortgage revenue is projected to decline 10–15%, in line with an expectation for lower refinancing activity, reflecting both seasonal trends and the impact of higher market rates.
Muted Loan Growth: Despite easing lending standards a number of times last year, overall loan growth has been sluggish for the last few months. According to the Federal Reserve’s latest data, since Nov 2016, commercial banks have witnessed the weakest loan growth in five years. While growth in consumer loans remained strong, commercial and industrial credit growth shrunk significantly.
Management expects loan growth to be stable sequentially, due to the implications of potential policy decisions and tax decisions of the new administration on customers. In addition, relatively flat growth in residential and commercial mortgage loans is anticipated due to sluggish seasonal growth and credit card balances.
Activities of U.S. Bancorp during the quarter to be reported were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter remained unchanged at 80 cents over the last seven days. Notably, the estimated figure represents year-over-year growth of 4.9%.
Stocks That Warrant a Look
Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for Navient Corporation (NAVI - Free Report) is +2.33% and it carries a Zacks Rank #3. The company is scheduled to release first-quarter results on Apr 18.
Comerica Incorporated (CMA - Free Report) has an Earnings ESP of +0.99% and a Zacks Rank #3. It is slated to report first-quarter results on Apr 18.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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What to Expect When U.S. Bancorp (USB) Reports Q1 Earnings?
U.S. Bancorp (USB - Free Report) is scheduled to report first-quarter 2017 results on Apr 19, before the opening bell.
The company’s fourth-quarter 2016 earnings surpassed the Zacks Consensus Estimate, aided by growth in net interest income and non-interest income. Further, the quarter recorded a rise in loan and deposit balances. However, on the down side, the quarter witnessed escalated expenses and higher credit costs.
Notably, U.S. Bancorp delivered positive earnings surprises in three of the four trailing quarters, with an average beat of 1.26%.
U.S. Bancorp Price and EPS Surprise
U.S. Bancorp Price and EPS Surprise | U.S. Bancorp Quote
Regarding the stock’s performance, shares of the company gained 16.2% over the past six months, underperforming growth of 22.0% recorded by the Zacks categorized Banks – Major Regional industry.
Will the upcoming earnings release give a boost to U.S. Bancorp’s stock? This depends largely on whether the firm is able to post a beat in the first quarter. However, our quantitative model doesn’t conclusively point toward an earnings beat this time. Here’s why.
U.S. Bancorp doesn’t have the right combination of the two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) – for increasing its chances of an earnings beat. Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Zacks ESP:The Earnings ESP for U.S. Bancorp is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 80 cents. This is a major indicator of a likely positive earnings surprise for the company. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S. Bancorp’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
Factors to Influence Q1 Results
Expenses to Trend Higher: Expenses might trend upward in the upcoming release due to the increase in FDIC surcharge, which went effective in third-quarter 2016. However, management anticipates expenses to decline slightly on a sequential basis, mainly driven by seasonally lower professional fees and a decline in tax credit amortization expense, resulting in a relatively stable efficiency ratio.
Pressure on Net Interest Margin to Ease Slightly: Though the prolonged low-rate environment has taken a toll on the bank’s margins for the past several quarters, the Fed’s recent rate hike for the third time since the financial crisis, and its commitment to raise rates faster (two more times) this year, based on a convincing pace of economic growth, should help banks get rid of shrinking margins.
Top-line Growth: Management remains optimistic that an improving economy will spur consumer activity, which will help both payments businesses and consumer lending businesses. An improved economic backdrop should also lead to a rise in business spending on development and capital investments. Further, mortgage revenue is projected to decline 10–15%, in line with an expectation for lower refinancing activity, reflecting both seasonal trends and the impact of higher market rates.
Muted Loan Growth: Despite easing lending standards a number of times last year, overall loan growth has been sluggish for the last few months. According to the Federal Reserve’s latest data, since Nov 2016, commercial banks have witnessed the weakest loan growth in five years. While growth in consumer loans remained strong, commercial and industrial credit growth shrunk significantly.
Management expects loan growth to be stable sequentially, due to the implications of potential policy decisions and tax decisions of the new administration on customers. In addition, relatively flat growth in residential and commercial mortgage loans is anticipated due to sluggish seasonal growth and credit card balances.
Activities of U.S. Bancorp during the quarter to be reported were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter remained unchanged at 80 cents over the last seven days. Notably, the estimated figure represents year-over-year growth of 4.9%.
Stocks That Warrant a Look
Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
BB&T Corporation has an Earnings ESP of +4.29% and a Zacks Rank #3. It is scheduled to report first-quarter 2017 results on Apr 20. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Navient Corporation (NAVI - Free Report) is +2.33% and it carries a Zacks Rank #3. The company is scheduled to release first-quarter results on Apr 18.
Comerica Incorporated (CMA - Free Report) has an Earnings ESP of +0.99% and a Zacks Rank #3. It is slated to report first-quarter results on Apr 18.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>