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Will Low Fee Income Mar People's United (PBCT) Q2 Earnings?
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People's United Financial, Inc. is scheduled to report second-quarter 2020 results on Jul 23. While its revenues are expected to have improved year over year, earnings might have declined.
Before we discuss the factors that might have influenced the results, let’s take a look at how the company performed in the last reported quarter.
People's United posted an earnings beat in first-quarter 2020. Improvement in loan balances along with higher fee income was partially offset by elevated expenses.
The company surpassed estimates on three occasions and posted in-line results in one of the trailing four quarters, the average beat being 16.29%.
Peoples United Financial, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for its earnings for the to-be-reported quarter is pegged at 23 cents, which suggests a fall of 32.4% from the year-ago reported number. However, the consensus estimate for sales of $495.9 million indicates 9.1% growth.
Factors at Play
Loan Growth: Per the Fed’s latest data, the company’s loan balance is likely to have improved on a sequential basis for the June-end quarter, supported by a rise in commercial and industrial (C&I) and commercial real estate loans.
Higher Net Interest Income (NII): A decent lending scenario during the quarter is likely to have supported NII. Also, the Zacks Consensus Estimate for average earning assets of $54.3 billion for the quarter indicates 5% sequential growth.
However, a decline in interest rates in March to near-zero level as a move to protect the economy from the impacts of the coronavirus outbreak is likely to have hurt the company’s net interest margin, thereby, affecting NII.
The Zacks Consensus Estimate of $411 million for NII suggests a 3.8% rise on a sequential basis.
Fee Income did not Offer Much Support: Due to the pandemic, a slowdown in economic activities in the quarter is likely to have strained fee income. The Zacks Consensus Estimate for bank service charges is at $25.1 million, suggesting a 10% year-over-year decline, while that for income from insurance is pegged at $8.8 million, indicating a 19% fall from the year-ago reported figure.
However, the consensus estimate of $12.23 million for commercial lending fees projects growth of 1.1% sequentially. Likewise, the Zacks Consensus Estimate for cash management fees of $7.7 million for the quarter indicates a 3.6% decline from the prior quarter.
Overall, the consensus estimate for non-interest income is pinned at $99 million, indicating a 20.2% sequential fall.
Higher Expenses: People’s United’s inorganic growth strategies are likely to have resulted in higher merger-related costs. Also, with the expansion of operations, compensation and benefits might have risen.
Earnings Whispers
The chances of People’s United beating the Zacks Consensus Estimate in the second quarter are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for People’s United is -17.56%.
Zacks Rank: People’s United currently has a Zacks Rank #3.
Huntington Bancshares Incorporated (HBAN - Free Report) is set to release earnings figures on Jul 23. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +5.62%.
Franklin Resources, Inc. (BEN - Free Report) is scheduled to release quarterly results on Jul 28. The company has an Earnings ESP of +5.27% and currently sports a Zacks Rank of 1.
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Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
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Will Low Fee Income Mar People's United (PBCT) Q2 Earnings?
People's United Financial, Inc. is scheduled to report second-quarter 2020 results on Jul 23. While its revenues are expected to have improved year over year, earnings might have declined.
Before we discuss the factors that might have influenced the results, let’s take a look at how the company performed in the last reported quarter.
People's United posted an earnings beat in first-quarter 2020. Improvement in loan balances along with higher fee income was partially offset by elevated expenses.
The company surpassed estimates on three occasions and posted in-line results in one of the trailing four quarters, the average beat being 16.29%.
Peoples United Financial, Inc. Price and EPS Surprise
Peoples United Financial, Inc. price-eps-surprise | Peoples United Financial, Inc. Quote
The Zacks Consensus Estimate for its earnings for the to-be-reported quarter is pegged at 23 cents, which suggests a fall of 32.4% from the year-ago reported number. However, the consensus estimate for sales of $495.9 million indicates 9.1% growth.
Factors at Play
Loan Growth: Per the Fed’s latest data, the company’s loan balance is likely to have improved on a sequential basis for the June-end quarter, supported by a rise in commercial and industrial (C&I) and commercial real estate loans.
Higher Net Interest Income (NII): A decent lending scenario during the quarter is likely to have supported NII. Also, the Zacks Consensus Estimate for average earning assets of $54.3 billion for the quarter indicates 5% sequential growth.
However, a decline in interest rates in March to near-zero level as a move to protect the economy from the impacts of the coronavirus outbreak is likely to have hurt the company’s net interest margin, thereby, affecting NII.
The Zacks Consensus Estimate of $411 million for NII suggests a 3.8% rise on a sequential basis.
Fee Income did not Offer Much Support: Due to the pandemic, a slowdown in economic activities in the quarter is likely to have strained fee income. The Zacks Consensus Estimate for bank service charges is at $25.1 million, suggesting a 10% year-over-year decline, while that for income from insurance is pegged at $8.8 million, indicating a 19% fall from the year-ago reported figure.
However, the consensus estimate of $12.23 million for commercial lending fees projects growth of 1.1% sequentially. Likewise, the Zacks Consensus Estimate for cash management fees of $7.7 million for the quarter indicates a 3.6% decline from the prior quarter.
Overall, the consensus estimate for non-interest income is pinned at $99 million, indicating a 20.2% sequential fall.
Higher Expenses: People’s United’s inorganic growth strategies are likely to have resulted in higher merger-related costs. Also, with the expansion of operations, compensation and benefits might have risen.
Earnings Whispers
The chances of People’s United beating the Zacks Consensus Estimate in the second quarter are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for People’s United is -17.56%.
Zacks Rank: People’s United currently has a Zacks Rank #3.
Stocks That Warrant a Look
The Earnings ESP for Moody’s Corporation (MCO - Free Report) is +7.17% and it carries a Zacks Rank of 3 at present. The company is slated to report third-quarter numbers on Jul 30. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Huntington Bancshares Incorporated (HBAN - Free Report) is set to release earnings figures on Jul 23. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +5.62%.
Franklin Resources, Inc. (BEN - Free Report) is scheduled to release quarterly results on Jul 28. The company has an Earnings ESP of +5.27% and currently sports a Zacks Rank of 1.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>