Back to top

Image: Bigstock

Regions Financial (RF) Q1 Earnings: Will it Beat Again?

Read MoreHide Full Article

Regions Financial Corporation (RF - Free Report) is scheduled to report first-quarter 2017 results before the opening bell on Apr 18.

In the last reported quarter, this banking giant’s earnings surpassed the Zacks Consensus Estimate. Results were driven by impressive revenue growth as a result of solid growth in loans and deposits. However, rise in operating expenses was a downside.

Shares of the company gained 38.9% in the last six months, outperforming the 27.7% growth for the Zacks categorized Southeast Banks Industry.

The Zacks Consensus Estimate for the current quarter remained stable at 22 cents per share in the last 30 days. However, Regions Financial has a decent earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters with an average beat of 6%.
 

Factors to Drive Q1 Results

Net Interest Income (NII) to Improve Modestly: While loan growth remained sluggish during the quarter, the latest rate hikes should lead to some improvement in net interest income. Further, a steeper yield curve in the quarter should positively impact Regions Financials’ net interest margin.

Declining Non Interest Income: The persistent decline in non-interest income has weighed on the top line for the last few years. Given the company’s previously announced posting order process for customer deposit accounts, which commenced in fourth-quarter 2015, the fee income is expected to decline in the lower end of the range of $10–$15 million in each quarter. This might have impacted the company’s non-interest income in Q1 as well.

Expenses Might Rise Slightly: Regions’ efficient expense management might decently support the bottom line during the quarter. Owing to the current global macroeconomic headwinds, management’s plan to slash $300 million of core expenses by 2018 is right on track. However, the company expects a marginal increase in its expenses, as a result of the investments that it is making for revenue generation.

Earnings Whispers

Our proven model doesn’t conclusively predict whether Regions Financial will be able to beat the Zacks Consensus Estimate in the first quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen.

Zacks ESP: The Earnings ESP for Regions Financial is 0.00%. This is because the Most Accurate Estimate of 22 cents is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Regions Financial’s Zacks Rank #2 (Buy) increases the predictive power of ESP. However, we also need to have a positive Earnings ESP to be confident of an earnings beat.

Stocks That Warrant a Look

Here are some other stocks from the finance space you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.

BancorpSouth, Inc. is slated to release results on Apr 19. It has an Earnings ESP of +2.63% and carries a Zacks Rank #3.

Zions Bancorporation (ZION - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3. The company is slated to release results on Apr 24.

Lazard Ltd (LAZ - Free Report) is scheduled to report results on Apr 27. It has an Earnings ESP of +11.27% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Regions Financial Corporation (RF) - free report >>

Zions Bancorporation, N.A. (ZION) - free report >>

Lazard, Inc. (LAZ) - free report >>

Published in