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Navient (NAVI) Q3 Earnings & NII Miss Estimates, Costs Dip
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Navient Corporation’s (NAVI - Free Report) third-quarter 2022 adjusted core earnings per share of 75 cents missed the Zacks Consensus Estimate of 77 cents. Also, the bottom line was lower than the prior-year quarter’s 92 cents.
The results of Navient were affected by the fall in non-interest income and net interest income (NII). An increase in the provision for loan losses also dragged the results. Nonetheless, lower expenses aided the company.
Navient’s GAAP net income was $105 million, down from $173 million in the prior-year quarter.
NII & Expenses Decrease, Provisions Rise
NII (on a non-GAAP basis) was $247 million, down 17.4% year over year. The reported figure missed the Zacks Consensus Estimate of $291.7 million.
Total other income fell 6% to $150 million.
Provision for loan losses was $28 million higher than $22 million in the prior-year quarter.
Total expenses declined 11% to $225 million. This was primarily due to a fall in operating expenses.
Segmental Performance
Federal Education Loans: The segment generated a net income of $94 million, down 23% year over year.
As of Sep 30, 2022, the company’s net Federal Family Education Loan Program (FFELP) loans were $46.89 billion, down 4.7% sequentially.
Consumer Lending: The segment reported a net income of $65 million, which decreased 11% from the year-ago quarter.
As of Sep 30, 2022, the company’s net private education loans totaled $19.15 billion, down 2.6% from the prior quarter. Navient originated $231 million of private education refinance loans.
Business Processing: The segment reported a net income of $9 million, down 66.7% from the year-ago quarter.
Capital Deployment Activities
In the third quarter, the company paid out $22 million in common stock dividends.
In the reported quarter, Navient repurchased $95 million of common stock. As of Sep 30, 2022, there was $685 million of the remaining share repurchase authority.
Our Take
Navient’s diversified business segments will support revenue growth. It has an eminent portfolio holder of private education loans. In the third quarter, the company lowered its expenses. However, declines in NII and fee income are worrisome.
Navient Corporation Price, Consensus and EPS Surprise
Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2022 earnings of $1.55 per share were in line with the Zacks Consensus Estimate. The bottom line rose 6.9% from the prior-year quarter’s adjusted earnings of $1.45.
Results benefited from higher NII, a rise in loan balance and increasing rates. However, lower non-interest income mainly due to rising mortgage rates was the undermining factor. Higher adjusted expenses and a rise in provisions were the other headwinds for HWC.
Washington Federal’s (WAFD - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) earnings of $1.07 per share handily surpassed the Zacks Consensus Estimate of 91 cents. The figure reflects a year-over-year jump of 48.6%.
Results were primarily aided by higher rates, robust deposits and improving loan balances, which drove NII. However, an increase in expenses, a fall in total other income and higher provisions were the headwinds for WAFD.
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Navient (NAVI) Q3 Earnings & NII Miss Estimates, Costs Dip
Navient Corporation’s (NAVI - Free Report) third-quarter 2022 adjusted core earnings per share of 75 cents missed the Zacks Consensus Estimate of 77 cents. Also, the bottom line was lower than the prior-year quarter’s 92 cents.
The results of Navient were affected by the fall in non-interest income and net interest income (NII). An increase in the provision for loan losses also dragged the results. Nonetheless, lower expenses aided the company.
Navient’s GAAP net income was $105 million, down from $173 million in the prior-year quarter.
NII & Expenses Decrease, Provisions Rise
NII (on a non-GAAP basis) was $247 million, down 17.4% year over year. The reported figure missed the Zacks Consensus Estimate of $291.7 million.
Total other income fell 6% to $150 million.
Provision for loan losses was $28 million higher than $22 million in the prior-year quarter.
Total expenses declined 11% to $225 million. This was primarily due to a fall in operating expenses.
Segmental Performance
Federal Education Loans: The segment generated a net income of $94 million, down 23% year over year.
As of Sep 30, 2022, the company’s net Federal Family Education Loan Program (FFELP) loans were $46.89 billion, down 4.7% sequentially.
Consumer Lending: The segment reported a net income of $65 million, which decreased 11% from the year-ago quarter.
As of Sep 30, 2022, the company’s net private education loans totaled $19.15 billion, down 2.6% from the prior quarter. Navient originated $231 million of private education refinance loans.
Business Processing: The segment reported a net income of $9 million, down 66.7% from the year-ago quarter.
Capital Deployment Activities
In the third quarter, the company paid out $22 million in common stock dividends.
In the reported quarter, Navient repurchased $95 million of common stock. As of Sep 30, 2022, there was $685 million of the remaining share repurchase authority.
Our Take
Navient’s diversified business segments will support revenue growth. It has an eminent portfolio holder of private education loans. In the third quarter, the company lowered its expenses. However, declines in NII and fee income are worrisome.
Navient Corporation Price, Consensus and EPS Surprise
Navient Corporation price-consensus-eps-surprise-chart | Navient Corporation Quote
Currently, Navient carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2022 earnings of $1.55 per share were in line with the Zacks Consensus Estimate. The bottom line rose 6.9% from the prior-year quarter’s adjusted earnings of $1.45.
Results benefited from higher NII, a rise in loan balance and increasing rates. However, lower non-interest income mainly due to rising mortgage rates was the undermining factor. Higher adjusted expenses and a rise in provisions were the other headwinds for HWC.
Washington Federal’s (WAFD - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) earnings of $1.07 per share handily surpassed the Zacks Consensus Estimate of 91 cents. The figure reflects a year-over-year jump of 48.6%.
Results were primarily aided by higher rates, robust deposits and improving loan balances, which drove NII. However, an increase in expenses, a fall in total other income and higher provisions were the headwinds for WAFD.