) is scheduled to report its second-quarter 2014 results before the
opening bell on Jul 15.
Comerica continued its earning streak by delivering the fifth
consecutive earnings beat in first-quarter 2014. Lower provision
and prudent expense management drove earnings per share of 73
cents, outpacing the Zacks Consensus Estimate by a penny.
Will Comerica be able to keep the earnings streak alive in this
quarter as well? Let's see how things have shaped up for this
Factors to Influence Q2 Results
Amid a competitive environment, shift in the portfolio mix towards
lower yielding loans as well as lower reinvestment rates for the
securities portfolio should keep Comerica's net interest margin
(NIM) under pressure in this quarter as well. The company has
experienced persistent decline in NIM since 2011 and has not been
able to reverse the trend in the recent quarters. The low
interest-rate environment, coupled with reduced purchase accounting
accretion, is expected to add further stress on NIM.
Given the downward trend in net interest income, banks are making
efforts to boost non-interest income and some have been able to
succeed. However, Comerica is facing challenges in maintaining
steady growth in its non interest income.
Lower consumer and business spending due to the sluggish
economic recovery has impacted Comerica's non-interest income,
which remained volatile since the last few quarters. As the company
has not revealed any measures to counter issues, we apprehend that
continuation of the same in the second quarter.
Among others factors, weak loan growth and stringent regulatory
norms could act as dampeners for the company's financials.
However, Comerica has some encouraging traits that may favorably
support its results. These include its efforts to improve asset
quality and reduce expenses.
Activities of Comerica during the quarter were inadequate to win
analysts' confidence. As a result, the Zacks Consensus Estimate for
the quarter remained stable at 76 cents per share over the last 7
Our proven model does not conclusively show that Comerica is likely
to beat the Zacks Consensus Estimate in the second quarter. That is
because a stock needs to have both a positive
and a Zacks Rank #1 (Strong Buy) or at least #2 (Buy) or #3 (Hold)
for this to happen. Unfortunately, this is not the case here as
The Earnings ESP for Comerica is 0.00%. This is because both the
Most Accurate estimate and the Zacks Consensus Estimate stand at 76
cents per share.
Comerica's Zacks Rank #2 increases the predictive power of ESP.
However, we also need to have a positive ESP to be confident of an
earnings surprise call.
Stocks That Warrant a Look
Here are some stocks you may want to consider, as our model shows
that these have the right combination of elements to post an
earnings beat this quarter:
The earnings ESP for
The PNC Financial Services Group, Inc.
) is +0.57% and it carries a Zacks Rank #3. The company is
scheduled to release its second-quarter results on Jul 16.
Fifth Third Bancorp
) has an earnings ESP of +4.44% and carries a Zacks Rank #3. It is
scheduled to report its second-quarter results on Jul 17.
Capital One Financial Corporation
) has an earnings ESP of +1.12% and carries a Zacks Rank #2. It is
expected to report its second-quarter results on Jul 17.
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