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Will Santander Consumer (SC) Disappoint Yet Again in Q1?
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Santander Consumer USA Holdings Inc. is scheduled to report first-quarter 2017 results on Apr 26, before the market opens.
Last quarter, Santander Consumer USA’s earnings lagged the Zacks Consensus Estimate, primarily due to a rise in total operating expenses. Lower revenues also hurt results to some extent.
Following the earnings lag, shares of the company fell nearly 5% in the last three months, ended Mar 31.
However, analysts maintained a neutral stance on Santander Consumer USA’s performance in the just-concluded quarter. The Zacks Consensus Estimate remained stable in the last seven days.
According to our proven model, it is less likely that Santander Consumer USA will be able to beat the Zacks Consensus Estimate in the first quarter. This is because the stock does not have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, which is required to increase the chances of an earnings surprise.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: The Earnings ESP for Santander Consumer USA is -2.78%. This is because the Most Accurate estimate of 35 cents is below the Zacks Consensus Estimate of 36 cents.
Zacks Rank: Santander Consumer USA’s Zacks Rank #3 increases the predictive power of ESP. However, we also need a positive Earnings ESP to be confident of an earnings beat.
Factors to Influence Q1 Results
Management expects net interest income in the quarter to be down 2–3% sequentially due to a change in its accounting policy regarding interest accrual for TDR loans.
However, other income is expected to be stable to slightly up compared to the last quarter. As, a result, total revenues are expected to remain almost stable.
On the expense front, management expects operating expenses to be flat to slightly lower on a sequential basis.
Due to seasonality, the company expects net charge-offs to be down $100–$120 million sequentially. However, allowance for loan losses is expected to be sequentially higher due to growth in TDR balances and seasonally higher originations. Thus, overall provisions are expected to be slightly lower on a sequential basis.
Stocks that Warrant a Look
Here are a few finance stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
Prosperity Bancshares, Inc. (PB - Free Report) is also scheduled to report results on Apr 26. It has an Earnings ESP of +1.02% and carries a Zacks Rank #3.
SVB Financial Group has an Earnings ESP of +0.54% and a Zacks Rank #2. It is expected to report results on Apr 27.
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While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
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Will Santander Consumer (SC) Disappoint Yet Again in Q1?
Santander Consumer USA Holdings Inc. is scheduled to report first-quarter 2017 results on Apr 26, before the market opens.
Last quarter, Santander Consumer USA’s earnings lagged the Zacks Consensus Estimate, primarily due to a rise in total operating expenses. Lower revenues also hurt results to some extent.
Following the earnings lag, shares of the company fell nearly 5% in the last three months, ended Mar 31.
However, analysts maintained a neutral stance on Santander Consumer USA’s performance in the just-concluded quarter. The Zacks Consensus Estimate remained stable in the last seven days.
Santander Consumer USA Holdings Inc. Price
Santander Consumer USA Holdings Inc. Price | Santander Consumer USA Holdings Inc. Quote
Earnings Whispers
According to our proven model, it is less likely that Santander Consumer USA will be able to beat the Zacks Consensus Estimate in the first quarter. This is because the stock does not have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, which is required to increase the chances of an earnings surprise.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: The Earnings ESP for Santander Consumer USA is -2.78%. This is because the Most Accurate estimate of 35 cents is below the Zacks Consensus Estimate of 36 cents.
Zacks Rank: Santander Consumer USA’s Zacks Rank #3 increases the predictive power of ESP. However, we also need a positive Earnings ESP to be confident of an earnings beat.
Factors to Influence Q1 Results
Management expects net interest income in the quarter to be down 2–3% sequentially due to a change in its accounting policy regarding interest accrual for TDR loans.
However, other income is expected to be stable to slightly up compared to the last quarter. As, a result, total revenues are expected to remain almost stable.
On the expense front, management expects operating expenses to be flat to slightly lower on a sequential basis.
Due to seasonality, the company expects net charge-offs to be down $100–$120 million sequentially. However, allowance for loan losses is expected to be sequentially higher due to growth in TDR balances and seasonally higher originations. Thus, overall provisions are expected to be slightly lower on a sequential basis.
Stocks that Warrant a Look
Here are a few finance stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
Evercore Partners Inc. (EVR - Free Report) is slated to release its results on Apr 26. The company has an Earnings ESP of +11.00% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prosperity Bancshares, Inc. (PB - Free Report) is also scheduled to report results on Apr 26. It has an Earnings ESP of +1.02% and carries a Zacks Rank #3.
SVB Financial Group has an Earnings ESP of +0.54% and a Zacks Rank #2. It is expected to report results on Apr 27.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>