For Immediate Release
Chicago, IL – October 21, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Texas Instruments (TXN), State Street Corporation (STT), Zions Bancorporation (ZION), Comerica Inc. (CMA) and Regions Financial (RF).
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Here are highlights from Tuesday’s AnalystBlog:
TI Beats; Guidance Conservative
Texas Instruments (TXN) reported third quarter results that beat the Zacks Consensus Estimate by 3 cents. Revenue beat the consensus by 2.1%.
Revenue of $2.88 billion was up 17.2% sequentially, the second straight quarter of 17%+ growth. However, revenue declined 15.0% on a year-over-year basis, the fourth consecutive quarter of double digit decline.
Then again, the rate of decline slowed somewhat, indicating that the company is coming out of the recession. The sequential increase was driven by normalization in the market, as customers stopped reducing inventory and started increasing production.
State Street Tops Zacks Estimates
State Street Corporation’s (STT) third quarter operating earnings of $1.05 per share were 5 cents ahead of the Zacks Consensus Estimate. Operating results for the quarter exclude $11 million in pre-tax merger and integration costs associated with the Investors Financial Services Corp. acquisition. However, the results were down 15.3% from $1.24 per share in the prior-year quarter.
On a GAAP basis, earnings for the quarter came in at $1.04 per share. This compares unfavorably with earnings of $1.09 in the year-ago quarter.
The year-over-year decrease in earnings was due primarily to an increase in shares outstanding and decrease in revenue, partially offset by reduced expenses.
Zions Shows Continued Losses
Zions Bancorporation (ZION) reported a third quarter 2009 net loss applicable to common shareholders of $179.5 million or $1.41 per share, compared to net loss of $40.7 million or 35 cents per share in the prior quarter and a net income of $33.4 million or $0.31 per share in the prior-year quarter. Results were substantially short of the Zacks Consensus Estimated loss of $1.29.
Results included the acquisition of the failed Vineyard Bank with FDIC assistance in July, which resulted in a pretax acquisition related gain of $146.2 million for the third quarter of 2009. It also included credit-related impairment losses on investment securities of $56.5 million compared to $42.0 million in second quarter of 2009.
Tax-equivalent net interest income for the quarter decreased 3.5% sequentially and 3.2% year-over-year to $482.0 million. Net Interest Margin (NIM) declined 18 bps sequentially and 22 bps on a year-over-year basis to 3.91%. The decline in NIM during the quarter was driven primarily by the discount amortization on the modified subordinated debt and an additional 0.07% for the conversion of subordinated debt to Series C preferred stock.
Comerica 3Q Losses Easing
Comerica Inc. (CMA) reported third quarter 2009 net loss applicable to common shareholders of $15.0 million or 10 cents per share compared to a net loss of $16.0 million or 10 cents per share in the prior quarter and a net income of $28.0 million or 19 cents per share in the prior-year quarter. Results were substantially ahead of the Zacks Consensus Estimated loss of 41 cents.
Continued growth in average core deposits, non-interest income and reduced non-interest expenses were impressive during the quarter. However, an 88.5% year-over-year increase in provision for loan losses and $34.0 million of preferred dividend payment to the U.S. Treasury Department under the Capital Purchase Program were the primary reasons for the loss.
As a result of better-than-expected top line and marginal enhancement of costs, the loss was substantially narrower than our estimates.
Regions Financial Underperforms
Regions Financial (RF) reported a third quarter loss of $437.0 million or 37 cents per diluted share, worse than the Zacks Consensus Estimate of a loss of 26 cents per share. Last year, the company reported a net income of $95 million — a profit of 13 cents per share.
The results suffered mainly due to increased loan loss provisioning, reflective of continued underlying economic weakness and the related loss implications to Regions’ loan portfolio.
Regions reported a net interest margin of 2.73%, up 11 basis points sequentially, benefiting from continued low-cost deposit growth, especially in non-interest bearing products and improving loan spreads due to better pricing discipline. As a result, taxable equivalent net interest income increased 1.7% sequentially to $845.0 million.
According to management, dramatically falling interest rates have worked as a primary headwind for net interest income over the past few quarters. It believes that trends in deposit pricing and loan spreads should continue to support a stable net interest margin during this period of historic low interest rates.
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