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Why is an Earnings Beat Less Likely for BNY Mellon (BK) in Q1?
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The Bank of New York Mellon Corporation (BK - Free Report) is scheduled to report first-quarter 2022 results on Apr 18, before market open. While its revenues in the to-be-reported quarter are expected to have witnessed a rise on a year-over-year basis, earnings are likely to have declined.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results were aided by provision benefits and higher fee income. Growth in the assets under management (AUM) balance was another tailwind.
BNY Mellon has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a surprise of 6.6%, on average.
The Bank of New York Mellon Corporation Price and EPS Surprise
The Zacks Consensus Estimate for the company’s first-quarter earnings is pegged at $0.86, which has decreased 4.4% over the past seven days. The estimate indicates a fall of 11.3% from the year-ago quarter’s reported number.
The consensus estimate for sales is pegged at $3.96 billion, implying a 1% rise from the prior-year quarter’s reported figure.
Key Factors & Estimates for Q1
Fee Revenues: Supported by overall asset inflows in the first quarter, BNY Mellon is expected to have recorded an improvement in the total AUM balance. Thus, the related fee is likely to have increased in the quarter.
The Zacks Consensus Estimate for asset servicing fees is pegged at $1.08 billion, suggesting growth of 9.3% from the previous quarter’s reported number.
The Zacks Consensus Estimate for total investment services fee (comprising more than 50% of the company’s total revenues) is pegged at $1.90 billion, which indicates a rise of 53.4% from the previous quarter’s reported number.
The consensus mark for financing-related fees is pegged at $49.50 million, which suggests a 5.3% rise sequentially. The consensus estimate for distribution and servicing fees is pegged at $28.76 million, indicating 2.7% growth from the previous quarter’s reported figure.
The consensus estimate for foreign exchange revenues is pegged at $215 million, suggesting a rise of 8% sequentially. However, the consensus mark for investment and other income of $65 million suggests a sequential decline of 39.3%.
The consensus estimate for total fees and other revenues is pegged at $3.21 billion, suggesting a 3.8% decline sequentially.
Net Interest Revenues (NIR): The overall lending scenario continued to improve in the first quarter. While interest rates continued to remain low, there was a hike in the same in mid-March. Although the actual impact of the rate hike is not anticipated to have been seen much in the to-be-reported quarter, it is expected to have slightly benefitted interest income.
Thus, despite the flattening of the yield curve, BNY Mellon’s interest income is expected to have been positively impacted in the quarter, supported by loan growth. The consensus mark for NIR for the first quarter is pegged at $682 million, indicating marginal sequential growth.
Expenses: Because of higher litigation and restructuring charges, BNY Mellon’s expenses have been elevated over the past few years. Nevertheless, overall costs are expected to have been manageable in the quarter under review, given the elimination of unnecessary management layers.
Management expects first-quarter staff expenses (excluding-notable items) to be up 6% year over year.
What the Zacks Model Unveils
According to our quantitative model, the chances of BNY Mellon beating the Zacks Consensus Estimate this time 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 better — which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for BNY Mellon is -1.54%.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
A couple of finance stocks that you may want to consider, as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Commerce Bancshares, Inc. (CBSH - Free Report) and Associated BancCorp (ASB - Free Report) .
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Why is an Earnings Beat Less Likely for BNY Mellon (BK) in Q1?
The Bank of New York Mellon Corporation (BK - Free Report) is scheduled to report first-quarter 2022 results on Apr 18, before market open. While its revenues in the to-be-reported quarter are expected to have witnessed a rise on a year-over-year basis, earnings are likely to have declined.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results were aided by provision benefits and higher fee income. Growth in the assets under management (AUM) balance was another tailwind.
BNY Mellon has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a surprise of 6.6%, on average.
The Bank of New York Mellon Corporation Price and EPS Surprise
The Bank of New York Mellon Corporation price-eps-surprise | The Bank of New York Mellon Corporation Quote
The Zacks Consensus Estimate for the company’s first-quarter earnings is pegged at $0.86, which has decreased 4.4% over the past seven days. The estimate indicates a fall of 11.3% from the year-ago quarter’s reported number.
The consensus estimate for sales is pegged at $3.96 billion, implying a 1% rise from the prior-year quarter’s reported figure.
Key Factors & Estimates for Q1
Fee Revenues: Supported by overall asset inflows in the first quarter, BNY Mellon is expected to have recorded an improvement in the total AUM balance. Thus, the related fee is likely to have increased in the quarter.
The Zacks Consensus Estimate for asset servicing fees is pegged at $1.08 billion, suggesting growth of 9.3% from the previous quarter’s reported number.
The Zacks Consensus Estimate for total investment services fee (comprising more than 50% of the company’s total revenues) is pegged at $1.90 billion, which indicates a rise of 53.4% from the previous quarter’s reported number.
The consensus mark for financing-related fees is pegged at $49.50 million, which suggests a 5.3% rise sequentially. The consensus estimate for distribution and servicing fees is pegged at $28.76 million, indicating 2.7% growth from the previous quarter’s reported figure.
The consensus estimate for foreign exchange revenues is pegged at $215 million, suggesting a rise of 8% sequentially. However, the consensus mark for investment and other income of $65 million suggests a sequential decline of 39.3%.
The consensus estimate for total fees and other revenues is pegged at $3.21 billion, suggesting a 3.8% decline sequentially.
Net Interest Revenues (NIR): The overall lending scenario continued to improve in the first quarter. While interest rates continued to remain low, there was a hike in the same in mid-March. Although the actual impact of the rate hike is not anticipated to have been seen much in the to-be-reported quarter, it is expected to have slightly benefitted interest income.
Thus, despite the flattening of the yield curve, BNY Mellon’s interest income is expected to have been positively impacted in the quarter, supported by loan growth. The consensus mark for NIR for the first quarter is pegged at $682 million, indicating marginal sequential growth.
Expenses: Because of higher litigation and restructuring charges, BNY Mellon’s expenses have been elevated over the past few years. Nevertheless, overall costs are expected to have been manageable in the quarter under review, given the elimination of unnecessary management layers.
Management expects first-quarter staff expenses (excluding-notable items) to be up 6% year over year.
What the Zacks Model Unveils
According to our quantitative model, the chances of BNY Mellon beating the Zacks Consensus Estimate this time 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 better — which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for BNY Mellon is -1.54%.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
A couple of finance stocks that you may want to consider, as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Commerce Bancshares, Inc. (CBSH - Free Report) and Associated BancCorp (ASB - Free Report) .
The Earnings ESP for Commerce Bancshares is +2.33% and it carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CBSH is scheduled to report quarterly numbers on Apr 19.
Associated BancCorp is slated to report quarterly earnings on Apr 21.
ASB, which sports a Zacks Rank of 1 at present, has an Earnings ESP of +0.81%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.