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Will High Fee Income Aid Northern Trust's (NTRS) Q1 Earnings?
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Northern Trust Corporation’s (NTRS - Free Report) first-quarter 2020 results, scheduled for an Apr 21 release, are expected to reflect a year-over-year rise in revenues, while earnings might display a decline.
Northern Trust uses a lag effect to calculate its corporate custody and investment management fees, i.e. the computations are based on the prior-quarter end valuations. Since the performance of equity markets was strong in the fourth quarter of 2019, the company might have registered growth in custody, servicing and management fees.
Notably, the company provides majority of its asset-management services through the C&IS unit, which generates more than 50% of total revenues. A rise in revenues in this segment is likely to have driven the company’s overall revenues.
Per the Zacks Consensus Estimate, the C&I segment’s custody and fund administration fees will likely go up 4.8% year over year to $393 million. Also, investment management revenues are likely to have climbed 6.7% on a year-over-year basis. Further, securities lending revenues are projected to be up 2%, year on year.
Therefore, with the steady performance of its components, total C&I trust, investment and other servicing fees are likely to have increased 3.9% year over year to $535 million. Also, the Zacks Consensus Estimate of $1.54 billion for the to-be-reported quarter’s sales reflects a year-over-year rise of 3.9%.
Here are the other factors that might have influenced the company’s quarterly performance:
Soft Loan Growth: Per the Fed’s latest data, the loan balance is likely to have been high on a sequential basis for the March-end quarter, supported by rise in commercial and industrial (C&I), real estate and consumer loans in the first two months of the quarter. However, a marginal decline in the consumer loan demand in March due to the virus outbreak and the soft demand for corporate loans as an uncertain economic environment resulted in lower business activities, hurting new investments, might have played spoilsport.
Muted Net Interest Income Growth: The Fed slashed interest rates to near zero this March, in order to shield the U.S. economy from the coronavirus-related mayhem. This is likely to have substantially hurt the company’s net interest margin and net interest income. Also, low deposit costs might have been an offsetting factor for margins.
Moreover, a soft lending scenario is predicted to have curtailed growth in net interest income to some extent. However, the Zacks Consensus Estimate for average interest earning assets of $115.7 million for the quarter indicates a 7.9% sequential improvement, while the NII is expected to decline 4.2% to $413 million.
High Foreign-Exchange Trading Revenues: Given the high foreign-exchange (“FX”) trading volatility in developing and emerging markets, along with increased volumes during the January-March quarter, the company’s revenues from FX trading might have been high. Moreover, the Zacks Consensus Estimate for income of $70 million for the quarter indicates a 7.7% sequential improvement.
Controlled Expenses: Northern Trust’s expenses in the quarter are anticipated to have been under control aided by its continued cost-saving initiatives.
Let’s have a look at what our quantitative model predicts:
Northern Trust does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing 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 Earnings ESP for Northern Trust is 0.00%.
Zacks Rank: Northern Trust currently carries a Zacks Rank of 4 (Sell).
In addition, the company’s activities during the quarter under review were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of $1.45 moved down 6.5% over the last 30 days. Also, the figure reflects a year-over-year decline of 2%.
Here are a few 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.
SB ONE BANCORP is likely to release earnings figures around Apr 28. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +0.85%.
The Earnings ESP for Carolina Financial Corporation is +1.43% and the stock carries a Zacks Rank of 3, currently. The company is expected to report quarterly numbers around Apr 22.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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Will High Fee Income Aid Northern Trust's (NTRS) Q1 Earnings?
Northern Trust Corporation’s (NTRS - Free Report) first-quarter 2020 results, scheduled for an Apr 21 release, are expected to reflect a year-over-year rise in revenues, while earnings might display a decline.
Northern Trust uses a lag effect to calculate its corporate custody and investment management fees, i.e. the computations are based on the prior-quarter end valuations. Since the performance of equity markets was strong in the fourth quarter of 2019, the company might have registered growth in custody, servicing and management fees.
Notably, the company provides majority of its asset-management services through the C&IS unit, which generates more than 50% of total revenues. A rise in revenues in this segment is likely to have driven the company’s overall revenues.
Per the Zacks Consensus Estimate, the C&I segment’s custody and fund administration fees will likely go up 4.8% year over year to $393 million. Also, investment management revenues are likely to have climbed 6.7% on a year-over-year basis. Further, securities lending revenues are projected to be up 2%, year on year.
Therefore, with the steady performance of its components, total C&I trust, investment and other servicing fees are likely to have increased 3.9% year over year to $535 million. Also, the Zacks Consensus Estimate of $1.54 billion for the to-be-reported quarter’s sales reflects a year-over-year rise of 3.9%.
Here are the other factors that might have influenced the company’s quarterly performance:
Soft Loan Growth: Per the Fed’s latest data, the loan balance is likely to have been high on a sequential basis for the March-end quarter, supported by rise in commercial and industrial (C&I), real estate and consumer loans in the first two months of the quarter. However, a marginal decline in the consumer loan demand in March due to the virus outbreak and the soft demand for corporate loans as an uncertain economic environment resulted in lower business activities, hurting new investments, might have played spoilsport.
Muted Net Interest Income Growth: The Fed slashed interest rates to near zero this March, in order to shield the U.S. economy from the coronavirus-related mayhem. This is likely to have substantially hurt the company’s net interest margin and net interest income. Also, low deposit costs might have been an offsetting factor for margins.
Moreover, a soft lending scenario is predicted to have curtailed growth in net interest income to some extent. However, the Zacks Consensus Estimate for average interest earning assets of $115.7 million for the quarter indicates a 7.9% sequential improvement, while the NII is expected to decline 4.2% to $413 million.
High Foreign-Exchange Trading Revenues: Given the high foreign-exchange (“FX”) trading volatility in developing and emerging markets, along with increased volumes during the January-March quarter, the company’s revenues from FX trading might have been high. Moreover, the Zacks Consensus Estimate for income of $70 million for the quarter indicates a 7.7% sequential improvement.
Controlled Expenses: Northern Trust’s expenses in the quarter are anticipated to have been under control aided by its continued cost-saving initiatives.
Let’s have a look at what our quantitative model predicts:
Northern Trust does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing 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 Earnings ESP for Northern Trust is 0.00%.
Zacks Rank: Northern Trust currently carries a Zacks Rank of 4 (Sell).
In addition, the company’s activities during the quarter under review were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of $1.45 moved down 6.5% over the last 30 days. Also, the figure reflects a year-over-year decline of 2%.
Northern Trust Corporation Price and EPS Surprise
Northern Trust Corporation price-eps-surprise | Northern Trust Corporation Quote
Stocks That Warrant a Look
Here are a few 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.
BCB Bancorp, Inc. (NJ) (BCBP - Free Report) is expected to release results around Apr 22. The company has an Earnings ESP of +4.17% and currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SB ONE BANCORP is likely to release earnings figures around Apr 28. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +0.85%.
The Earnings ESP for Carolina Financial Corporation is +1.43% and the stock carries a Zacks Rank of 3, currently. The company is expected to report quarterly numbers around Apr 22.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>