We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Washington Federal (WAFD) Down 2% Since the Last Earnings Report?
Read MoreHide Full Article
More than a month has gone by since the last earnings report for Washington Federal, Inc. (WAFD - Free Report) . Shares have lost about 2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Washington Federal Beats on Q4 Earnings, Revenues Rise
Washington Federal reported fourth-quarter fiscal 2017 (ended Sep 30) earnings of 52 cents per share, which surpassed the Zacks Consensus Estimate of 48 cents. The figure also reflects a year-over-year increase of 6.1%.
Results were primarily driven by an increase in net interest revenues and non-interest income. Also, rise in loan and deposit balances, and improving asset quality acted as tailwinds. However, higher operating expenses were an undermining factor.
Washington Federal’s net income came in at $46.1 million, up 4.3% from the prior-year quarter.
For fiscal 2017, net income of $173.5 million or $1.94 per share was up from $164 million or $1.78 per share in the last year.
Revenues Improve, Expenses Escalate
Net revenues for the reported quarter were $128.7 million, up 9.1% year over year. Also, the figure surpassed the Zacks Consensus Estimate of $121 million.
For fiscal 2017, net revenues totaled $484.1 million, up 3.6% from the prior year.
Net interest income was $112.4 million, up 9.4% from the year-ago quarter. Also, net interest margin increased 21 basis points (bps) year over year to 3.22%.
Other income grew 7.1% year over year to $16.3 million. The rise was mainly driven by increase in deposit fee income.
Operating expenses rose 13.1% from the prior-year quarter to $62.6 million. The rise was largely due to higher compensation and benefit, information technology costs and other expenses.
The company’s efficiency ratio came in at 48.68%, up marginally from 48.54% a year ago. A rise in efficiency ratio indicates deterioration in profitability.
At the end of the reported quarter, return on average common equity was 9.18%, up from 8.96% at the end of the prior-year quarter. Return on average assets was 1.22% compared with 1.19% in the year-ago quarter.
Improvement in Credit Quality
As of Sep 30, 2017, the ratio of non-performing assets to total assets was 0.46% compared with 0.48% as of Sep 30, 2016. Provision for loan losses was $0.5 million during the reported quarter, down significantly from $3.1 million in the prior-year quarter. Further, the allowance for loan losses and reserve for unfunded commitments was 1.07% of gross loans outstanding, in line with Sep 30, 2016 level.
Loans & Deposits Rise
As of Sep 30, 2017, net loans receivables were $10.9 billion, up 9.8% from Sep 30, 2016. Also, customer deposit accounts were $10.8 billion, increasing 2.2% from the Sep 30, 2016 level.
Share Repurchases
During fiscal 2017, Washington Federal repurchased 3.1 million shares at an average price of $31.36 per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the past month as none of them issued any earnings estimate revisions.
At this time, Washington Federal's stock has a poor Growth Score of F, however its Momentum is doing a lot better with a C. Following the exact same course, the stock was allocated also a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Washington Federal (WAFD) Down 2% Since the Last Earnings Report?
More than a month has gone by since the last earnings report for Washington Federal, Inc. (WAFD - Free Report) . Shares have lost about 2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Washington Federal Beats on Q4 Earnings, Revenues Rise
Washington Federal reported fourth-quarter fiscal 2017 (ended Sep 30) earnings of 52 cents per share, which surpassed the Zacks Consensus Estimate of 48 cents. The figure also reflects a year-over-year increase of 6.1%.
Results were primarily driven by an increase in net interest revenues and non-interest income. Also, rise in loan and deposit balances, and improving asset quality acted as tailwinds. However, higher operating expenses were an undermining factor.
Washington Federal’s net income came in at $46.1 million, up 4.3% from the prior-year quarter.
For fiscal 2017, net income of $173.5 million or $1.94 per share was up from $164 million or $1.78 per share in the last year.
Revenues Improve, Expenses Escalate
Net revenues for the reported quarter were $128.7 million, up 9.1% year over year. Also, the figure surpassed the Zacks Consensus Estimate of $121 million.
For fiscal 2017, net revenues totaled $484.1 million, up 3.6% from the prior year.
Net interest income was $112.4 million, up 9.4% from the year-ago quarter. Also, net interest margin increased 21 basis points (bps) year over year to 3.22%.
Other income grew 7.1% year over year to $16.3 million. The rise was mainly driven by increase in deposit fee income.
Operating expenses rose 13.1% from the prior-year quarter to $62.6 million. The rise was largely due to higher compensation and benefit, information technology costs and other expenses.
The company’s efficiency ratio came in at 48.68%, up marginally from 48.54% a year ago. A rise in efficiency ratio indicates deterioration in profitability.
At the end of the reported quarter, return on average common equity was 9.18%, up from 8.96% at the end of the prior-year quarter. Return on average assets was 1.22% compared with 1.19% in the year-ago quarter.
Improvement in Credit Quality
As of Sep 30, 2017, the ratio of non-performing assets to total assets was 0.46% compared with 0.48% as of Sep 30, 2016. Provision for loan losses was $0.5 million during the reported quarter, down significantly from $3.1 million in the prior-year quarter. Further, the allowance for loan losses and reserve for unfunded commitments was 1.07% of gross loans outstanding, in line with Sep 30, 2016 level.
Loans & Deposits Rise
As of Sep 30, 2017, net loans receivables were $10.9 billion, up 9.8% from Sep 30, 2016. Also, customer deposit accounts were $10.8 billion, increasing 2.2% from the Sep 30, 2016 level.
Share Repurchases
During fiscal 2017, Washington Federal repurchased 3.1 million shares at an average price of $31.36 per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the past month as none of them issued any earnings estimate revisions.
Washington Federal, Inc. Price and Consensus
Washington Federal, Inc. Price and Consensus | Washington Federal, Inc. Quote
VGM Scores
At this time, Washington Federal's stock has a poor Growth Score of F, however its Momentum is doing a lot better with a C. Following the exact same course, the stock was allocated also a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.