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First Republic Beats on -40.8% Deposits; Whirlpool Outperforms
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Continued cautious trading habits led off a new week of trading, the same as we’ve basically been enduring over the past week-plus. With so many crucial earnings reports ands some major economic prints awaiting us this week, it’s understandable that market participants would be playing it close to the vest. The Dow gained 66 points on the session, +0.20%, while the S&P 500 went up just +0.09%. The Nasdaq and the small-cap Russell 2000 were down for the day, -0.29% and -0.15%, respectively.
Minutes after the closing bell today, First Republic — the San Francisco-based bank that looked in harms way five weeks ago — reported better-than-expected Q1 results on both top and bottom lines: earnings of $1.23 per share were well ahead of the anticipated $0.72, with revenues in the quarter reaching $1.21 billion, outpacing the Zacks consensus $1.13 billion. At first glance, this would appear to be as good a report as investors could have expected.
However, deposit numbers — which analysts expected would be key ahead of the report’s release — were far below expectations: $104 billion versus $145 billion consensus and the $176 billion in Q4. This amounts to a -40.8% drop in deposits quarter over quarter, and includes the $30 billion of deposits from a consortium of other financial insitutions. Shares of FRC plummeted -13% on this news, but have since clawed back to -5% from Monday’s closing price, which had been +12% ahead of the earnings report.
Other elements in this report include First Republic announcing job cuts of 20-25% of its workforce and a reduction in executive compensation moving forward. Considering the circumstances of the past month or so, to see the banks deposits having stabilized in the last week of Q1 may portend to better days ahead, as was its growth in Wealth Management of +6.7%. Overall, things still don’t look rosy at First Republic, but so far in Q1 earnings season, we don’t see its issues affecting the entire banking industry.
Household appliances giant Whirlpool (WHR - Free Report) also posted Q1 earnings results after today’s close, and it also outperformed expectations on both top and bottom lines. For earnings, the company brought $2.66 per share, bettering the expected $2.14 but well behind the $5.31 per share from the year-ago quarter. Revenues of $4.65 billion surpassed the Zacks consensus $4.55 billion on an improving North American market. The durable goods staple reaffirmed full-year guidance for now, even with the Q1 beats.
Tomorrow, aside from Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) posting quarterly earnings, we’ll also see results from Archer-Daniels-Midland (ADM - Free Report) , Chipotle (CMG - Free Report) , General Electric (GE - Free Report) , General Motors (GM - Free Report) , McDonald’s (MCD - Free Report) , PepsiCo (PEP - Free Report) , UPS (UPS - Free Report) and Visa (V - Free Report) . We’ll continue in this manner for most of the rest of the week, and will have a much more articulate view of earnings season as a whole than we do now.
Image: Bigstock
First Republic Beats on -40.8% Deposits; Whirlpool Outperforms
Continued cautious trading habits led off a new week of trading, the same as we’ve basically been enduring over the past week-plus. With so many crucial earnings reports ands some major economic prints awaiting us this week, it’s understandable that market participants would be playing it close to the vest. The Dow gained 66 points on the session, +0.20%, while the S&P 500 went up just +0.09%. The Nasdaq and the small-cap Russell 2000 were down for the day, -0.29% and -0.15%, respectively.
Minutes after the closing bell today, First Republic — the San Francisco-based bank that looked in harms way five weeks ago — reported better-than-expected Q1 results on both top and bottom lines: earnings of $1.23 per share were well ahead of the anticipated $0.72, with revenues in the quarter reaching $1.21 billion, outpacing the Zacks consensus $1.13 billion. At first glance, this would appear to be as good a report as investors could have expected.
However, deposit numbers — which analysts expected would be key ahead of the report’s release — were far below expectations: $104 billion versus $145 billion consensus and the $176 billion in Q4. This amounts to a -40.8% drop in deposits quarter over quarter, and includes the $30 billion of deposits from a consortium of other financial insitutions. Shares of FRC plummeted -13% on this news, but have since clawed back to -5% from Monday’s closing price, which had been +12% ahead of the earnings report.
Other elements in this report include First Republic announcing job cuts of 20-25% of its workforce and a reduction in executive compensation moving forward. Considering the circumstances of the past month or so, to see the banks deposits having stabilized in the last week of Q1 may portend to better days ahead, as was its growth in Wealth Management of +6.7%. Overall, things still don’t look rosy at First Republic, but so far in Q1 earnings season, we don’t see its issues affecting the entire banking industry.
Household appliances giant Whirlpool (WHR - Free Report) also posted Q1 earnings results after today’s close, and it also outperformed expectations on both top and bottom lines. For earnings, the company brought $2.66 per share, bettering the expected $2.14 but well behind the $5.31 per share from the year-ago quarter. Revenues of $4.65 billion surpassed the Zacks consensus $4.55 billion on an improving North American market. The durable goods staple reaffirmed full-year guidance for now, even with the Q1 beats.
Tomorrow, aside from Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) posting quarterly earnings, we’ll also see results from Archer-Daniels-Midland (ADM - Free Report) , Chipotle (CMG - Free Report) , General Electric (GE - Free Report) , General Motors (GM - Free Report) , McDonald’s (MCD - Free Report) , PepsiCo (PEP - Free Report) , UPS (UPS - Free Report) and Visa (V - Free Report) . We’ll continue in this manner for most of the rest of the week, and will have a much more articulate view of earnings season as a whole than we do now.
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