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Finance Stocks' Q2 Earnings to Watch Ahead: BATS, OMF & More
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The Q2 earnings for the finance sector is almost coming to an end with most of its companies having released results. Performance of the companies so far reflects a marginal improvement over the prior quarter. The industry backdrop hasn’t improved much, given the continued global growth concerns and low interest rate environment. However, rebound in oil prices and positive domestic economic factors alleviated the pressure on the finance industry to some extent.
Per the latest Zacks Earnings Preview report, overall earnings for the S&P 500 stocks in the Finance sector are expected to be down 3.1% year over year. This compares with a 6.9% decline in earnings in the previous quarter. However, revenues are expected to decline 0.4% versus a 2.7% increase in the prior quarter.
About 80% of the S&P 500 companies in the finance sector have reported results for second-quarter 2016 so far. Total earnings for these companies decreased 4.2% year over year despite a revenue improvement of 1.1%. However, 66.7% companies have surpassed bottom-line expectations and 52.8% beat on top line.
Our quantitative model offers some insights into stocks that are about to report their earnings.
Per the model, in order to be confident of an earnings beat, a stock needs to have the right combination of the two key criteria, a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Let’s see what’s in store for the following companies that are expected to report second-quarter results on Aug 4.
Bats Global Markets : We expect the company to beat earnings expectations this time. The combination of a Zacks Rank #2 and ESP of +3.23% make us confident of an earnings beat. The Zacks Consensus Estimate for the quarter stands at 31 cents. Notably, estimates have been stable lately, ahead of the company’s earnings release.
Hercules Capital, Inc. (HTGC - Free Report) : The Zacks Consensus Estimate of 29 cents for the company reflects a year-over-year increase of 27.5%. While estimates remained unchanged ahead of the company’s second-quarter results, we are not confident of an earnings beat as the company has a Zacks Rank #3 with an Earnings ESP of +0.00%.
Notably, the company reported an average positive earnings surprise of 10% in the trailing four quarters.
Essent Group Ltd. (ESNT - Free Report) : Estimates have been stable lately, ahead of the release of the company’s quarterly results. The Zacks Consensus Estimate of 54 cents for the company reflects a year-over-year increase of 31.7%.However, the combination of a Zacks Rank #3 with an Earnings ESP of 0.00% makes surprise prediction difficult for this company as well.
Notably, the company recorded an average positive earnings surprise of 1.6% in the trailing four quarters.
OneMain Holdings, Inc. (OMF - Free Report) : The Zacks Consensus Estimate of $1.00 reflects solid year-over-year growth of 87.9%. However, we are not confident of an earnings beat as the company has a Zacks Rank #3 with an Earnings ESP of -3.00%.
Notably, estimates have been stable lately, prior to the company’s second-quarter earnings release. The company reported positive earnings surprise in three of the trailing four quarters with an average positive surprise of 13.6%.
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Finance Stocks' Q2 Earnings to Watch Ahead: BATS, OMF & More
The Q2 earnings for the finance sector is almost coming to an end with most of its companies having released results. Performance of the companies so far reflects a marginal improvement over the prior quarter. The industry backdrop hasn’t improved much, given the continued global growth concerns and low interest rate environment. However, rebound in oil prices and positive domestic economic factors alleviated the pressure on the finance industry to some extent.
Per the latest Zacks Earnings Preview report, overall earnings for the S&P 500 stocks in the Finance sector are expected to be down 3.1% year over year. This compares with a 6.9% decline in earnings in the previous quarter. However, revenues are expected to decline 0.4% versus a 2.7% increase in the prior quarter.
About 80% of the S&P 500 companies in the finance sector have reported results for second-quarter 2016 so far. Total earnings for these companies decreased 4.2% year over year despite a revenue improvement of 1.1%. However, 66.7% companies have surpassed bottom-line expectations and 52.8% beat on top line.
Our quantitative model offers some insights into stocks that are about to report their earnings.
Per the model, in order to be confident of an earnings beat, a stock needs to have the right combination of the two key criteria, a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Let’s see what’s in store for the following companies that are expected to report second-quarter results on Aug 4.
Bats Global Markets : We expect the company to beat earnings expectations this time. The combination of a Zacks Rank #2 and ESP of +3.23% make us confident of an earnings beat. The Zacks Consensus Estimate for the quarter stands at 31 cents. Notably, estimates have been stable lately, ahead of the company’s earnings release.
BATS GLOBAL MKT Price and EPS Surprise
BATS GLOBAL MKT Price and EPS Surprise | BATS GLOBAL MKT Quote
Hercules Capital, Inc. (HTGC - Free Report) : The Zacks Consensus Estimate of 29 cents for the company reflects a year-over-year increase of 27.5%. While estimates remained unchanged ahead of the company’s second-quarter results, we are not confident of an earnings beat as the company has a Zacks Rank #3 with an Earnings ESP of +0.00%.
Notably, the company reported an average positive earnings surprise of 10% in the trailing four quarters.
HERCULES CAP Price and EPS Surprise
HERCULES CAP Price and EPS Surprise | HERCULES CAP Quote
Essent Group Ltd. (ESNT - Free Report) : Estimates have been stable lately, ahead of the release of the company’s quarterly results. The Zacks Consensus Estimate of 54 cents for the company reflects a year-over-year increase of 31.7%.However, the combination of a Zacks Rank #3 with an Earnings ESP of 0.00% makes surprise prediction difficult for this company as well.
Notably, the company recorded an average positive earnings surprise of 1.6% in the trailing four quarters.
ESSENT GROUP Price and EPS Surprise
ESSENT GROUP Price and EPS Surprise | ESSENT GROUP Quote
OneMain Holdings, Inc. (OMF - Free Report) : The Zacks Consensus Estimate of $1.00 reflects solid year-over-year growth of 87.9%. However, we are not confident of an earnings beat as the company has a Zacks Rank #3 with an Earnings ESP of -3.00%.
Notably, estimates have been stable lately, prior to the company’s second-quarter earnings release. The company reported positive earnings surprise in three of the trailing four quarters with an average positive surprise of 13.6%.
ONEMAIN HOLDNGS Price and EPS Surprise
ONEMAIN HOLDNGS Price and EPS Surprise | ONEMAIN HOLDNGS Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>