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Tale of the Tape

Swayta Shah

Santander Consumer (SC) Q3 Earnings & Revenues Decline
November 09, 2016

SC

Trades from $3

Have you been eager to see how Santander Consumer USA Holdings Inc. (SC - Free Report) performed in Q3 in comparison with the market expectations? Let’s quickly scan through the key facts from this Texas-based technology-driven consumer finance company’s earnings release this morning:

Earnings Decline

Santander Consumer came out with earnings per share of 59 cents, down 11% year over year. The reported quarter included onetime tax benefit of 3 cents. The Zacks Consensus Estimate of 54 cents.

Lower revenues were primarily responsible for the fall in earnings.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Santander Consumer depicted a neutral stance prior to the earnings release. The Zacks Consensus Estimate has remained unchanged over the last 7 days.

However, Santander Consumer does not a decent earnings surprise history. The company had an average negative beat of 13.9% in the trailing four quarters.

SANTANDER CNSMR Price and EPS Surprise

 

SANTANDER CNSMR Price and EPS Surprise | SANTANDER CNSMR Quote

Revenue Came In Lower Than Expected    

Santander Consumer posted revenues of $1.21 billion, which was significantly below the Zacks Consensus Estimate of $1.70 billion. Also, it compared unfavorably with the year-ago number of $1.38 billion.

Key Statistics

Total originations: $5.2 billion
Net interest margin: 11.8%
Net charge-off ratio: 8.3%
Return on average equity: 17.1%
Return on average assets: 2.2%

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #2 (Buy) for Santander Consumer. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look unfavorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

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