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What's in the Cards for Huntington's (HBAN) Q2 Earnings?

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Huntington Bancshares (HBAN - Free Report) is scheduled to report second-quarter 2019 results on Jul 25, before the opening bell. The company’s results are projected to reflect year-over-year growth in revenues and earnings.

In the last reported quarter, the company’s earnings came in line with the Zacks Consensus Estimate. Higher net interest income and fee income were the positives. Improvement in loans and deposits along with margin expansion acted as tailwinds. However, results were adversely impacted by rise in operating costs and higher provisions.

Huntington’s activities in the second quarter were inadequate to impress analysts. As a result, the Zacks Consensus Estimate for earnings of 32 cents remained unchanged over the past 30 days. Nonetheless, it indicates growth of 6.7% from the year-ago reported figure.

Moreover, the consensus estimate for revenues of $1.18 billion suggests a rise of 5.5%.
 

Before we take a look at what our quantitative model predicts, let’s check the factors that are expected to impact second-quarter results.

Factors That Might Influence Q2 Results

Net Interest Income (NII) Might Disappoint: A soft lending scenario during the to-be-reported quarter is predicted to impede growth in net interest income (NII) to an extent. Particularly, weakness in revolving home equity loans, commercial and industrial (C&I), and commercial real estate loans might offset growth in consumer loans. Moreover, the company’s net interest margin may be affected due to the yield-curve flattening, the Fed’s accommodative-policy stance and steadily rising deposit betas.

However, rise in interest earning assets is likely to support top-line growth. The Zacks Consensus Estimate predicts earnings assets of $100 billion, up 3.7% year over year.

Fee Income Might Escalate: Dismal capital markets performance is a matter of concern. During the second quarter, several concerns, including some lingering from the prior quarters, like Brexit-related and U.S.-China trade war uncertanties, and expectations of global economic slowdown persisted. Therefore, this source of income is likely to disappoint.

Nonetheless, consumer spending trend was stronger during the April-June quarter, which will likely bolster the bank’s credit and debit card revenues. In a reversal in trend, mortgage banking performance is also projected to improve on the back of lower mortgage rates, which drove refinancing activities during the quarter. Seasonality aided mortgage banking revenues too.

Expenses Under Control: Management remains focused on expense management, Also, there were no major outflows during the quarter that might have impacted the firm’s earnings unusually in the to-be-reported quarter.

Here is what our quantitative model predicts:

Huntington doesn’t have the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of -2.82%.

Zacks Rank: It carries a Zacks Rank #3, at present.

Stocks That Warrant a Look

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

Ares Capital Corporation (ARCC - Free Report) is slated to release results on Jul 30. The company has an Earnings ESP of +1.02% and sports a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Franklin Resources, Inc. (BEN - Free Report) is +0.13% and the stock also currently flaunts a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Jul 30.

Federated Investors, Inc. has an Earnings ESP of +1.26% and holds a Zacks Rank of 2 (Buy), currently. It is set to report June quarter-end results on Jul 25.

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