Have you been eager to see how SunTrust Banks, Inc. (STI - Analyst Report) performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this Atlanta-based commercial banking organization’s earnings release this morning:
An Earnings Beat
SunTrust came out with earnings per share of 89 cents, beating the Zacks Consensus Estimate of 81 cents.
Lower expenses were mainly responsible for earnings beat.
How Was the Estimate Revision Trend?
You should note that the earnings estimate revisions for SunTrust depicted a neutral stance prior to the earnings release. The Zacks Consensus Estimate has remained unchanged at 81 cents over the last 7 days.
However, SunTrust has a decent earnings surprise history. Before posting the earnings beat in Q2, the company delivered positive surprises in three of the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 7.02% in the trailing four quarters.
Revenue Came In Higher Than Expected
SunTrust posted net revenue of $2.04 billion, which was above the Zacks Consensus Estimate of $2.01 billion. However, it compared unfavorably with the year-ago number of $2.17 billion.
Key Developments:
§ Average client deposits increased 9% year over year, with all of the growth coming from low-cost deposits.
§ Average loan balances slightly declined on a sequential basis largely owing to loan sale activity, partly offset by growth in higher yielding loan products.
§ During the quarter, SunTrust increased its quarterly dividend 20% to 24 cents per and repurchased $175 million worth of shares.
§ Asset quality continued to improve.
What Zacks Rank Says
The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for SunTrust. 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 favorable, it all depends on what sense the just-released report makes to the analysts.
