Regions Financial (RF) First quarter earnings and revenue miss estimates – April 19, 2024

Regions Financial (RF Free Report) came out with quarterly earnings of $0.44 per share, missing the Zacks Consensus Estimate of $0.46 per share. This compares with earnings of $0.62 per share a year ago. These figures have been adjusted for one-off items.

This quarterly report represents an earnings surprise of -4.35%. A quarter ago, it was expected that this holding company for Regions Bank would post earnings of $0.48 per share when it actually produced earnings of $0.52, delivering a surprise of 8.33%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Regions Financial, which belongs to the Zacks Banks – Southeast industry, posted revenues of $1.75 billion for the quarter ended March 2024, missing the Zacks Consensus Estimate by 0.02%. This compares to revenues of $1.95 billion a year ago. The company has surpassed consensus revenue estimates twice over the last four quarters.

The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings outlook.

Regions Financial stocks have lost about 2% since the beginning of the year, versus the S&P 500’s gain of 5.1%.

What is the future for the financial regions?

While Regions Financial has underperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no easy answers to this important question, but one reliable measure that can help investors address this issue is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock prices and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this earnings release, the trend in estimate revisions for the financial regions was mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the coming quarters and the current fiscal year will change in the coming days. The current consensus EPS estimate is $0.47 on $1.75 billion in revenues for the coming quarter and $1.98 on $7.09 billion in revenues for the current fiscal year.

Investors should be aware that the industry outlook can also have a material impact on the stock’s performance. In terms of the Zacks Industry Rank, Banks – Southeast currently sits in the top 37% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a more than 2-to-1 margin.

Popular (BPOP Free Report), another stock in the same sector, has yet to report results for the quarter ending March 2024. Results are expected to be released on April 23.

This company, which operates Banco Popular and other banks in Puerto Rico and the US, is expected to post quarterly earnings of $1.96 per share in its upcoming report, representing a year-over-year change of -11.7%. The consensus EPS estimate for the quarter has remained unchanged over the past thirty days.

Popular’s revenue is expected to reach $706 million, up 1.8% from the same quarter last year.

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