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Synchrony Financial (SYF) Q3 Earnings Top Estimates, Rise Y/Y
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Synchrony Financial’s (SYF - Free Report) third-quarter 2019 earnings per share of $1.22 beat the Zacks Consensus Estimate by 8.9%. The bottom line also surged 34% year over year on the back of higher net interest income. This excludes the impact of the Walmart portfolio.
Results in Detail
The company’s net interest income increased 4% to $4.4 billion in the third quarter, primarily owing to loan receivables growth.
However, other income rose 35% to $85 million.
In the quarter under review, loan receivables climbed 6% year over year.
Deposits were $66 billion, up 6% from the year-ago quarter.
Provision for loan loss plunged 30% year over year to $1 billion on the back of a significant amount of reserve reductions pertaining to the Walmart portfolio.
Total other expenses inched up 1% to $1.1 billion, primarily due to higher marketing and business development, information processing and other expenses.
Synchrony Financial Price, Consensus and EPS Surprise
The company’s interest and fees on loans grew 5.5% year over year on the back of loan receivables.
Loan receivables reduced 11% while the average active accounts ascended 1%.
Payment Solutions
Interest and fees on loans rose 7% year over year on the back of loan receivables growth. Loan receivables augmented 7%, led by home furnishings and power products.
Purchase volume expanded 5% while average active account rose 3%.
CareCredit
Interest and fees on loans increased 9% year over year, attributable to higher loans receivables.
While purchase volume registered 10% growth, the average active account reported a 4% rise.
Financial Position
Total assets as of Sep 30, 2019 were $106 billion, down 0.8% from the level as of Dec 31, 2018.
Total borrowings as of third-quarter 2019 end were $20.3 billion, down 15.1% from 2018-end level.
The company’s balance sheet was consistently strong during the reported quarter with total liquidity of $21.7 billion, reflecting 20.5% of the total assets.
While return on assets was 3.9%, the return on equity was 28.3%.
Efficiency ratio was 30.9% in the third quarter of 2019.
Capital Deployment
During the quarter under consideration, the company purchased shares worth $550 million and paid a dividend of 22 cents per share.
Global Payments Inc. (GPN - Free Report) is slated to announce third-quarter earnings on Oct 31. The consensus estimate for earnings is pegged at $1.67, implying growth from $1.44 reported in the prior-year quarter. The stock carries a Zacks Rank of 3.
Discover Financial Services (DFS - Free Report) is scheduled to release third-quarter earnings on Oct 22. The Zacks Consensus Estimate for the same stands at $2.29, indicating growth of 11.7% from the year-ago reported figure. The stock is a Zacks #3 Ranked player.
Brown & Brown, Inc. (BRO - Free Report) is set to report third-quarter earnings on Oct 28. The consensus mark for earnings is pinned at 39 cents, suggesting 2.6% growth from the year-earlier reported figure. The company sports a Zacks Rank #1 (Strong Buy).
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time. See 7 breakthrough stocks now>>
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Synchrony Financial (SYF) Q3 Earnings Top Estimates, Rise Y/Y
Synchrony Financial’s (SYF - Free Report) third-quarter 2019 earnings per share of $1.22 beat the Zacks Consensus Estimate by 8.9%. The bottom line also surged 34% year over year on the back of higher net interest income. This excludes the impact of the Walmart portfolio.
Results in Detail
The company’s net interest income increased 4% to $4.4 billion in the third quarter, primarily owing to loan receivables growth.
However, other income rose 35% to $85 million.
In the quarter under review, loan receivables climbed 6% year over year.
Deposits were $66 billion, up 6% from the year-ago quarter.
Provision for loan loss plunged 30% year over year to $1 billion on the back of a significant amount of reserve reductions pertaining to the Walmart portfolio.
Total other expenses inched up 1% to $1.1 billion, primarily due to higher marketing and business development, information processing and other expenses.
Synchrony Financial Price, Consensus and EPS Surprise
Synchrony Financial price-consensus-eps-surprise-chart | Synchrony Financial Quote
Sales Platforms Update
Retail Card
The company’s interest and fees on loans grew 5.5% year over year on the back of loan receivables.
Loan receivables reduced 11% while the average active accounts ascended 1%.
Payment Solutions
Interest and fees on loans rose 7% year over year on the back of loan receivables growth. Loan receivables augmented 7%, led by home furnishings and power products.
Purchase volume expanded 5% while average active account rose 3%.
CareCredit
Interest and fees on loans increased 9% year over year, attributable to higher loans receivables.
While purchase volume registered 10% growth, the average active account reported a 4% rise.
Financial Position
Total assets as of Sep 30, 2019 were $106 billion, down 0.8% from the level as of Dec 31, 2018.
Total borrowings as of third-quarter 2019 end were $20.3 billion, down 15.1% from 2018-end level.
The company’s balance sheet was consistently strong during the reported quarter with total liquidity of $21.7 billion, reflecting 20.5% of the total assets.
While return on assets was 3.9%, the return on equity was 28.3%.
Efficiency ratio was 30.9% in the third quarter of 2019.
Capital Deployment
During the quarter under consideration, the company purchased shares worth $550 million and paid a dividend of 22 cents per share.
Rank
Synchrony Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases From Finance Sector
Global Payments Inc. (GPN - Free Report) is slated to announce third-quarter earnings on Oct 31. The consensus estimate for earnings is pegged at $1.67, implying growth from $1.44 reported in the prior-year quarter. The stock carries a Zacks Rank of 3.
Discover Financial Services (DFS - Free Report) is scheduled to release third-quarter earnings on Oct 22. The Zacks Consensus Estimate for the same stands at $2.29, indicating growth of 11.7% from the year-ago reported figure. The stock is a Zacks #3 Ranked player.
Brown & Brown, Inc. (BRO - Free Report) is set to report third-quarter earnings on Oct 28. The consensus mark for earnings is pinned at 39 cents, suggesting 2.6% growth from the year-earlier reported figure. The company sports a Zacks Rank #1 (Strong Buy).
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>