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Messages - ThePitBoss

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1
Breaking News / Union Pacific Railways Earnings Conference Call
« on: January 19, 2017, 09:59:04 AM »
During 3Q16 call, $UNP announced its plans to acquire 100 locomotives in 2017 as part of the previous purchase commitments. 2017 capital plan now includes about 60 locomotives with remainder being delayed into 2018.

For 1Q17, $UNP expects volumes to be slightly positive and a tougher pricing environment. For FY17, the company expects carloading growth to be up in the low-single digit range. Inflation is expected to be around 3% and costs to be higher. $UNP plans to achieve approx. $350-400MM of savings in this year.

$UNP said that it is paying close attention to the potential outcomes in terms of the impact on either NAFTA or other international trade agreements. The company added that it is preparing for any of the potential outcomes that might occur. $UNP is optimistic that those decisions will benefit U.S. trade and the U.S. economy.

With regards to appointing Beth Whited as $UNP's Chief Marketing Officer, CEO Lance Fritz said that the Board supported his decision to change the leadership team. Eric Butler, who served as Chief Marketing Officer, was appointed as Chief Administrative Officer. Fritz added that this management change was a normal and routine succession plan.

https://alphastreet.com/app#/home

2
Breaking News / Netflix NFLX Earnings To Watch Jan 18 2017
« on: January 18, 2017, 03:41:13 PM »
Netflix (NFLX) reported Q4 revenue and profit above analysts’ expectations

The big beat was on new subscribers, international forecast and also forecast this quarter’s profit much higher sending shares sharply higher after the close.

Earnings: Revenue in the three months ended in December rose to $2.48 billion, yielding EPS of 15 cents. Analysts had been at $2.47 billion and 20 cents per share, excluding some costs.

Full Report:
http://traderscommunity.com/forum/index.php?topic=1060.0

3
Breaking News / TDAmeritrade (AMTD) Earnings To Watch Jan 18 2017
« on: January 18, 2017, 03:38:42 PM »
TD Ameritrade $AMTD Higher Earnings and Accounts on Investor Confidence

TDAmeritrade (AMTD) released earnings following Interactive Brokers (IBKR) last night. The brokers give us an idea of the health and depth of financial markets. Trading volumes have soared since the Trump election in November, we know this from the money center banks that have reported already. TD Ameritrade is working to wrap up its deal to buy rival brokerage Scottrade Financial Services Inc.

Earnings: EPS of 41 cents on revenue of $859 million. Analysts expected fiscal Q1 EPS up 5% to 41 cents as revenue increases 5.6% to $857.3 million boosted by increased commissions and fees.
Client Assets New client assets grew at annualized rate of 10% to $19 billion. Total client assets up 15% to $797 billion. Average client trades per day rose 11% to 487,000.


Full Report:
http://traderscommunity.com/forum/index.php?topic=1072.0

4
Breaking News / Charles Schwab $SCHW Earnings To Watch Jan 18 2017
« on: January 18, 2017, 03:36:12 PM »
New Charles Schwab Retail Brokerage Accounts Lift $SCHW Earnings

Earnings: EPS of 36 cents on revenue of $1.97 billion. Estimates were Q4 EPS +50% to 36 cents on revenue +17% to $1.98 billion.

Client Assets New retail brokerage accounts jumped 21% to 182,000. Financial planning help conversations rose 10% to 32,000 clients. Total client assets at year-end were up 11% at $2.78 trillion.

Full Report:
http://traderscommunity.com/forum/index.php?topic=1073.0


5
Netflix (NFLX) reported Q4 revenue and profit above analysts’ expectations

The big beat was on new subscribers, international forecast and also forecast this quarter’s profit much higher sending shares sharply higher after the close.

Earnings: Revenue in the three months ended in December rose to $2.48 billion, yielding EPS of 15 cents. Analysts had been at $2.47 billion and 20 cents per share, excluding some costs.


https://alphastreet.com/app#/home

Subscribers: NFLX added 1.93 million streaming video subscribers domestically and 5.12 million internationally, for a total of 7.05 million new members. This compares to its forecast for 5.2 million additions inn total offered back in October. Analyst consensus was 5.17 million additions, or 1.44 million, domestic, and 3.73 million, internationally.

For the current quarter, the company forecast domestic and international subscriber additions of 1.5 million and 3.7 million. The Street has been at 1.76 million and 3.2 million, respectively.

Guidance: For the current quarter, the company forecast 37 cents EPS, well above consensus of 17 cents.

NFLX international segment, the company expects a greater membership impact from its content slate in 2H17. On a sequential basis, the company believes its strong 4Q16 results likely pulled forward some net adds from 1Q17 to 4Q16. NFLX expects the international segment to be slightly contribution profit positive in 1Q17.

The company also plans on investing internationally over the remaining quarters of 2017 & consequently anticipate an international contribution loss in 2Q17. On a full year basis, $NFLX expect international contribution loss to improve substantially YonY.

Reaction: Netflix shares are up $11.06, or over 8%, at $144.31.

6
Charles Schwab (SCHW) along with TDAmeritrade (AMTD) released earnings following Interactive Brokers (IBKR) last night. The brokers give us an idea of the health and depth of financial markets. Trading volumes have soared since the Trump election in November, we know this from the money center banks that have reported already.

Earnings: EPS of 36 cents on revenue of $1.97 billion. Estimates were Q4 EPS +50% to 36 cents on revenue +17% to $1.98 billion.
Client Assets New retail brokerage accounts jumped 21% to 182,000. Financial planning help conversations rose 10% to 32,000 clients. Total client assets at year-end were up 11% at $2.78 trillion.
 

Reaction: Charles Schwab NYSE: SCHW Jan 18, 12:37 PM EST 40.34 +0.01 +0.02%


https://alphastreet.com/app#/company/SCHW

Schwab's Q3 report showed core net new assets grew by $30 billion, sustaining what the firm called a "solid" 5% annualized organic growth rate. At the end of Q3 SCHW had 10 million brokerage accounts up 4% and 1.1 million bank accounts up 6%.

More Earnings News

UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange
Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 
Live From The Pit

7
TDAmeritrade (AMTD) released earnings following Interactive Brokers (IBKR) last night. The brokers give us an idea of the health and depth of financial markets. Trading volumes have soared since the Trump election in November, we know this from the money center banks that have reported already. TD Ameritrade is working to wrap up its deal to buy rival brokerage Scottrade Financial Services Inc.

Earnings: EPS of 41 cents on revenue of $859 million. Analysts expected fiscal Q1 EPS up 5% to 41 cents as revenue increases 5.6% to $857.3 million boosted by increased commissions and fees.
Client Assets New client assets grew at annualized rate of 10% to $19 billion. Total client assets up 15% to $797 billion. Average client trades per day rose 11% to 487,000.
 

Reaction: TD Ameritrade Holding NYSE: AMTD Jan 18, 12:07 PM EST 46.20 +0.33 +0.72% after having risen 27% since the election.

Quote
"Strong organic growth from net new client assets, rate-sensitive assets and new accounts, coupled with emerging tailwinds from the improving interest rate environment, provides a solid base for future earnings growth," said CFO Steve Boyle in a statement.

More Earnings News

UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange
Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 

Live From The Pit

8
Mizuho raised Netflix Inc. $NFLX to Buy from Neutral with a $152 price target versus a prior close of $133.70.

NFLX closed at a record high Friday and 52-week range is $79.95 to $133.93.

Netflix shares were down 1.42 -1.07% at  131.47USD Tuesday morning after hit another record high of 135.40 Monday morning before reversing.

9
Wells Fargo WFC / Wells Fargo $WFC downgraded to Hold from Buy at Argus
« on: January 18, 2017, 09:38:40 AM »
Wells Fargo & Co. WFC was downgraded to Hold from Buy at Argus, with the $53.78 share price having exceeded the firm’s prior $53 price target.

Quote
The downgrade reflects the rebound in Wells Fargo shares since the November 8 election and includes the prospects for more revenue headwinds as it strives to repair its reputation.

10
Breaking News / Goldman Sachs $GS Earnings To Watch Jan 18 2017
« on: January 18, 2017, 09:35:34 AM »
Goldman Sachs $GS reported much-better-than-expected fourth-quarter earnings before open Wednesday.

Earnings: EPS of $5.08, with revenue up to $8.17 billion. EPS was expected at $4.82 after a mortgage-securities settlement a year earlier gouged earnings, with revenue up 6% to $7.72 billion. $GS reported a jump in 4Q16 earnings driven by higher revenue and lower net provisions for mortgage-related litigation and regulatory matters as well as improved operating environment.

Fixed income, currency, and commodities (FICC) trading revenue up 78% to $2 billion.

Full Report: http://traderscommunity.com/forum/index.php?topic=1061.msg6264#msg6264

11
Breaking News / Citigroup $C Earnings To Watch Jan 18 2017
« on: January 18, 2017, 09:33:37 AM »
Citigroup  $C reported fourth-quarter and full-year 2016 results before markets opened Wednesday morning.

C reported a rise in 4Q16 earnings driven by lower operating expenses and cost of credit as well as 25% growth in Citicorp net income. Net income rose to $3.57Bil or $1.14 per share from $3.34Bil or $1.02 per share last year.

Fourth-quarter results also compare to the consensus estimates for EPS of $1.12 on revenue of $17.3 billion. $C  Revenue fell to $17.01Bil from $18.46Bil, due to absence of net gains on asset sales in Citi Holdings.

Full Report: http://traderscommunity.com/forum/index.php?topic=1063.msg6263#msg6263

12
Goldman Sachs $GS reported much-better-than-expected fourth-quarter earnings before open Wednesday.

Earnings: EPS of $5.08, with revenue up to $8.17 billion. EPS was expected at $4.82 after a mortgage-securities settlement a year earlier gouged earnings, with revenue up 6% to $7.72 billion. $GS reported a jump in 4Q16 earnings driven by higher revenue and lower net provisions for mortgage-related litigation and regulatory matters as well as improved operating environment.

Fixed income, currency, and commodities (FICC) trading revenue up 78% to $2 billion.


https://alphastreet.com/app#/company/GS

GS maintained strong capital ratios and liquidity. The firm's common equity tier 1 ratio as calculated in accordance with the standardized approach and the Basel III advanced approach was 14.5% and 13.1%, and the firm's global core liquid assets were $226Bil as of Dec. 31, 2016.



GS' revenue in Investment Banking for 4Q16 declined 4% from last year, while revenue in Institutional Client Services jumped 25%. Revenue in Investing and Lending increased 15% on higher revenue in debt securities and loans. Revenue in Investment Management rose 3% on higher incentive fees and transaction revenues.




Reaction: Goldman Sachs Group NYSE: GS Premarket 233.21 -2.53 -1.07%

Live From The Pit

13
Breaking News / Citigroup $C Earnings In Line on Lower Cost of Credit
« on: January 18, 2017, 08:21:26 AM »
Citigroup  $C reported fourth-quarter and full-year 2016 results before markets opened Wednesday morning.

C reported a rise in 4Q16 earnings driven by lower operating expenses and cost of credit as well as 25% growth in Citicorp net income. Net income rose to $3.57Bil or $1.14 per share from $3.34Bil or $1.02 per share last year.

Fourth-quarter results also compare to the consensus estimates for EPS of $1.12 on revenue of $17.3 billion. $C  Revenue fell to $17.01Bil from $18.46Bil, due to absence of net gains on asset sales in Citi Holdings.



For the full year, Citigroup reported EPS of $4.72 and revenues of $69.9 billion, compared with 2015 EPS of $5.40 and revenues of $76.4 billion. Analysts had estimated EPS of $4.71 and revenues of $70.45 billion.

Revenues at Citicorp rose 6%, driven by increases of 11% in the bank’s institutional clients group and a 2% boost in its global consumer banking group.

Citi reported that Citi Holdings revenues fell 79% year over year, reflecting the absence of net gains from asset sales. As of the end of the fourth quarter, Citi Holdings assets were $54 billion, 33% below the prior year period and 11% below the prior quarter, primarily reflecting continued asset sales. As of January 18, 2017, Citigroup had signed agreements to reduce Citi Holdings assets by an additional $9 billion.

Citigroup will no longer report Citi Holdings results separately after this quarter. At its peak, Citi Holdings had over $800 billion in assets, generating sometimes multibillion dollar losses in a single quarter. Today, its $54 billion of assets are only 3% of Citigroup’s balance sheet.



C's deposits for 4Q16 were $929Bil, up 2%, and up 4% in constant dollars. In constant dollars, Citicorp deposits increased 5%, driven by a 6% increase in ICG deposits and a 3% increase in Global Consumer Banking (GCB) deposits.
 
C's loans for 4Q16 were $624Bil, up 1% from last year and 3% in constant dollars. In constant dollars, 6% growth in Citicorp loans was partially offset by continued declines in Citi Holdings, driven primarily by continued reductions in the North America mortgage portfolio.

The bank’s allowance for loan losses totaled $12.1 billion for the quarter, down from $12.6 billion in the prior year quarter. Loans totaled $624 billion, up 1% year over year, and up 3% in constant dollars.

Quote
Our core businesses are beginning to produce the returns our investors expect and deserve. In 2016, we returned nearly $11 billion in capital to our shareholders. Even with this capital return, we ended the year with a Common Equity Tier 1 Capital ratio of 12.5%, 40 basis points higher than when we started the year, showing the capability of this franchise to consistently generate and return significant amounts of capital. - CEO Michael Corbat

Buybacks

During 4Q16, $C repurchased about 79MM common shares and returned a total of $4.7Bil to common shareholders in the form of common share repurchases and dividends. At year-end, $C's common equity tier 1 capital ratio was 12.5%, up from 12.1% last year, on earnings and a reduction in risk-weighted assets.

Guidance

The bank did not offer guidance in its press release, but the consensus estimates call for first-quarter EPS of $1.30 on revenues of $18.26 billion. The EPS estimate for the 2017 fiscal year is $5.23 on revenues of $72.82 billion.

Reaction:

Citigroup Inc NYSE: C - Jan 18, 9:17 AM EST Pre-market: 58.22 -0.16 -0.27%
Shares closed on Tuesday at $58.38. The current 52-week range is $34.52 to $61.63.

Live From the Pit


14
Interactive Brokers (IBKR) along with TDAmeritrade (AMTD) earnings give us an idea of the health and depth of financial markets. Trading volumes have soared since the Trump election in November, we know this from the money center banks that have reported already. IBKR is one of the largest automated global electronic brokers giving us an inight into the retail end o the marketplace.

Earnings: IBKR reported a drop in 4Q16 earnings due to lower trade volumes and a drop in revenue. Net income fell to $4MM or $0.07 per share from $17MM or $0.25 per share last year. Revenue dropped to $193MM from $271MM.

Reaction: Interactive Brokers Group NASDAQ: IBKR After-hours $37.05 -.97 -2.55%

 

IBKR's results for 2016 were positively impacted by strong growth in net interest income, which grew 24% from 2015.





It was also noticed the non-recurrence of unsecured customer losses caused by the sudden move in the value of the Swiss franc in January 2015 following the SNB's 10% devaluation of the Franc. This caused massive losses and led to IBKR leaving the forex market for accounts under $10 million.
 
IBKR BoD declared a quarterly cash dividend of $0.10 per share. This dividend is payable on March 14, 2017 to shareholders of record as of March 1, 2017.

More Earnings News

UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange
Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 
Live From The Pit

15
Breaking News / Mizuho Raised Netflix $NFLX Ahead of Earnings This Week
« on: January 17, 2017, 12:36:47 PM »
Mizuho raised Netflix Inc. $NFLX to Buy from Neutral with a $152 price target versus a prior close of $133.70.

NFLX closed at a record high Friday and 52-week range is $79.95 to $133.93.

16
JP Morgan JPM / JPMorgan Chase $JPM downgraded to Market Perform
« on: January 17, 2017, 12:33:20 PM »
JPMorgan Chase & Co. JPM downgraded to Market Perform by Keefe Bruyette & Woods.

From Outperform with an $89 price target

17
Breaking News / Re: Davos - Oil Magnates Say Shale Will Hinder Rally
« on: January 17, 2017, 11:51:19 AM »
Hard not to agree Heidi best thing that happened to the US Shale was the OPEC oil meeting. As always enjoy your writing.

18
Breaking News / UnitedHealth Group $UNH Earnings To Watch Jan 17 2017
« on: January 17, 2017, 10:27:51 AM »
UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange

Days away from the Trump Presidency a timely earnings report from the big health insurer UnitedHealth Group (UNH). UNH beat fourth-quarter earnings forecasts Tuesday aided by reduced cost pressure from its ObamaCare exchange business. UnitedHealth has managed to avoid volatility from ObamaCare and antitrust nerves which have plagued other insurers.

Much of this is from UNH's Optum health services unit, UnitedHealth is up 13% postelection.

Earnings: Earnings of $2.11 per share were up 50.7% from a year ago and 4 cents ahead of consensus.  Revenue rose 9.0% to $47.52 billion, topping views of $47.13 billion.

Reaction: UnitedHealth Group NYSE: UNH Jan 17 11:10 AM EST 159.26 -2.54 -1.57%

Full Report:

UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange

19
Breaking News / Morgan Stanley $MS Earnings To Watch Jan 17 2017
« on: January 17, 2017, 10:25:24 AM »
Morgan Stanley $MS Earnings Beat on Revenue and Profit

Morgan Stanley Tuesday posted its best fourth quarter since the global financial crisis,

MS reported a profit of $1.67 billion, or 81 cents a share, that compares with the $908 million, or 39 cents a share, it reported in the same period a year earlier. This was bank's highest profit in any fourth quarter since 2006. Revenue in the fourth quarter grew 17% to $9.02 billion from $7.74 billion a year earlier. Analysts polled by Thomson Reuters had expected revenue of $8.47 billion and earnings of 65 cents a share.

Morgan Stanley had lost money two of the past five fourth quarters, in part due to legal set-asides that are now largely behind it.

Full Report:

Morgan Stanley $MS Earnings Beat on Revenue and Profit

20
Breaking News / UnitedHealth $UNH Earnings Conference Call
« on: January 17, 2017, 10:19:50 AM »
In Medicare UNH grew its medical membership organically by 625,000 people, of which about two-thirds was through Medicare Advantage. The positive Medicare Advantage performance in 2016 was driven by the combination of premium and benefit stability, and improved service and clinical performance, leading to good retention rates.

In Medicaid UNH said that it added 100,000 people in 4Q16, bringing the full-year growth to 585,000 people. The company added that in 2017, it will introduce services in the states of Virginia and Missouri and plans to enter Colorado via the pending partnership with Rocky Mountain Health Plan.

21
Days away from the Trump Presidency a timely earnings report from the big health insurer UnitedHealth Group (UNH). UNH beat fourth-quarter earnings forecasts Tuesday aided by reduced cost pressure from its ObamaCare exchange business. UnitedHealth has managed to avoid volatility from ObamaCare and antitrust nerves which have plagued other insurers.

Much of this is from UNH's Optum health services unit, UnitedHealth is up 13% postelection.

Earnings: Earnings of $2.11 per share were up 50.7% from a year ago and 4 cents ahead of consensus.  Revenue rose 9.0% to $47.52 billion, topping views of $47.13 billion.

Reaction: UnitedHealth Group NYSE: UNH Jan 17 11:10 AM EST 159.26 -2.54 -1.57%

 



UnitedHealth said its medical costs as a share of premium revenue fell 1.9 percentage points to 80.8% in Q4, helped by "reduced individual market pressure."

Optum

Optum unit revenue growth temporarily slowed in Q4 due a 4.8% decline in revenues at the OptumRx pharmacy benefit management services unit. That decline reflected a loss of business that had been anticipated when UnitedHealth bought Catamaran.

UNH stated that the Catamaran acquisition had an 18% operating earnings growth in 4Q16 for Optum overall, led by 27% growth at OptumRx. Looking into 2017, OptumInsight's year-end backlog grew 21% to $12.6Bil, said the company. The company added that it is optimistic about its outlook for 2017 with revenue exceeding $90Bil.

UnitedHealth remains in a handful of ObamaCare exchange markets in 2017, and CEO Stephen Hemsley may offer clues about the company's plans for 2018 as Republicans move to repeal the law's key provisions.



Guidance:

UNH Maintained its financial outlook for 2017:

Revenue of $197 billion-$199 billion and adjusted EPS of $9.30-$9.60. Wall Street analysts see revenue of $198.3 billion and EPS of $9.51.

More Earnings News

Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 
Live From The Pit

22
Breaking News / Morgan Stanley $MS Earnings Conference Call
« on: January 17, 2017, 08:34:01 AM »
MS stated that it is more optimistic at the end of 2016 than in the beginning of 2016.

The surge in consumer confidence after the U.S. election, the recent and anticipated fed rate hike, strengthening U.S. economy and potential corporate tax reform are positives for the business, the company said.


23
Breaking News / Morgan Stanley $MS Earnings Beat on Revenue and Profit
« on: January 17, 2017, 08:13:19 AM »
Morgan Stanley Tuesday posted its best fourth quarter since the global financial crisis,

MS reported a profit of $1.67 billion, or 81 cents a share, that compares with the $908 million, or 39 cents a share, it reported in the same period a year earlier. This was bank's highest profit in any fourth quarter since 2006. Revenue in the fourth quarter grew 17% to $9.02 billion from $7.74 billion a year earlier. Analysts polled by Thomson Reuters had expected revenue of $8.47 billion and earnings of 65 cents a share.

Morgan Stanley had lost money two of the past five fourth quarters, in part due to legal set-asides that are now largely behind it.

Quote
"Markets were open and functioning around the world, and activity levels remained high throughout the quarter, divergent views are now more conducive to trading" ."There is clearly more optimism today than there was this time a year ago."Chief Financial Officer Jonathan Pruzan said.


The firm's return on equity was 8% for the year, up from 7.8% in 2015, including accounting adjustments, but still short of the 10% target laid out by Mr. Gorman.



https://alphastreet.com/app#/home

Quote
Morgan Stanley last spring received Federal Reserve approval to increase its shareholder payouts for 2017, though was required to resubmit its plan to address shortcomings, which it did last month, Mr. Pruzan said "We spent a lot of time, energy and effort." ..

Revenue in the division which trades stocks and stock-linked instruments, rose 7.4% to $1.95 billion from $1.82 billion a year ago, while debt-trading revenue nearly tripled to $1.47 billion from $550 million a year earlier.

Total sales and trading revenue grew to $3.19 billion from $2.37 billion in the year-earlier period, including accounting adjustments.

Investment-banking revenue, which includes merger advisory and underwriting fees, rose 4.9% to $1.27 billion from $1.21 billion in the fourth quarter of 2015. Fees from corporate mergers fell 17%. Along with rivals, Morgan Stanley, the No. 2 M&A adviser last year, faces a tough comparison with 2015 when merger activity set a record as chief executives scrambled for growth.

In wealth management revenue rose 6.4% to $3.99 billion from $3.75 billion a year earlier. The unit's profit margin was 22%, down from 23% last quarter and just shy of the range Mr. Gorman has targeted for 2017.

Wealth advisers keep a larger haul of the revenue they bring in than bankers or trader, they are less profitable than, say, investment banking, where margins can approach 50%. Morgan Stanley's compensation ratio was 46% for the year, compared with 47% last year.

Overall annual expenses fell 3.3% as Mr. Gorman seeks to make good on his promise to trim $1 billion in costs, assuming flat revenue.

Morgan Stanley's smallest, Investment-management revenue fell 19% to $500 million and its pretax profit margin fell to single digits. That division manages money for other asset managers, pension funds and corporations.

MS' BoD declared quarterly dividend of $0.20 per share. The dividend is payable on Feb. 15, 2017 to common shareholders of record on Jan. 31, 2017.

During 4Q16, MS repurchased about $1Bil of its common stock or about 27MM shares.

Morgan Stanley shares rose 0.8% premarket. They have gained 28% since the election.

24
Breaking News / What to Expect From Citigroup $C Earnings This Week
« on: January 15, 2017, 12:28:51 PM »
Citigroup (C) reports fourth-quarter results on Jan. 18 before the market opens. Citi follows Bank of America (BAC) , Wells Fargo (WFC) and JPMorgan (JPM) along with the other money center major banks  Morgan Stanley (MS) and Goldman Sachs (GS) with another big bankers earnings week. Since Donald Trump won on Election Day there has been a huge run higher on Citi and the other bank stocks. Trading income was the biggest surge for most banks in Q4 and $C along with $MS looks to have the biggest jump in total trading revenue at 23% versus a year earlier estimates Deutsche Bank analyst Matt O'Connor.

Citibank Consensus Forecast
 

Citigroup earnings per share (EPS) expected to be $1.12 in 4Q16. In the previous quarter, $C reported EPS of $1.24 according to consensus data from Thomson Reuters. Net revenues for Citigroup are expected to be $17.3 billion in 4Q16, 7% lower year-over-year. Net income is expected to be $3.2 billion for the quarter, 19% higher compared to the same period last year.

Of note $C is the only major money center bank trading at less than book value. It is trading at 11.4 times forward earnings and 0.8 times book value.

The bank rally has been fueled by expectations for easier regulations including a possible repeal of DoddFrank and infrastructure spending. The Federal Reserve decision to raise rates has also helped banks.  The new surge in home prices has also buoyed optimism for the banking business and banks profits thereto.



Citbank's trading business stands to also benefit should the economy rebound along with rising interest rates, which could help its lending spreads. Corporate tax savings would also aid profitability. Citigroup CFO John Gerspach said in October that his firm might have benefited from a retreat by Deutsche Bank (DB) in the government-bond and currency-trading businesses.



What Analysts Think

UBS analyst Saul Martinez downgraded Citigroup to sell from buy and lowered target price to $58 from $64.

Martinez saysCiti’s global footprint means it will see less benefit from lower corporate tax rates and higher interest rates in the U.S. He adds its international positioning means it is more exposed to potential fallout from more protectionist policies under a Trump administration.

SocGen analyst Andrew Lim on buy backs

SocGen believes in the “Trump Effect” to  increase net interest income, lower corporate taxes and allow for the return of excess capital. Trump’s proposed fiscal stimulus has steepened the U.S. yield curve.

“The increase in earnings will likely be significant for some banks, in our view, more than justifying the recent rally in share prices for US-centric banks,” Lim wrote in a note. he added “We see Trump’s policies as supportive of FX trading
going forward, amplified by ongoing macro-political volatility in Europe and emerging markets.”

Lim also highlighted Morgan Stanley, Citigroup Inc and BofA as having the most excess capital and using it to buy back shares could boost EPS by 26 percent, 21 percent and 10 percent respectively.

Barclays analyst Jason Goldberg reiterated his overweight rating on Citigroup in an investor note last week.

Morgan Stanley analyst Betsy Graseck upgraded Citigroup from “equal weight” to “overweight” and upgraded the target price from $50 to $70.

Macquarie analyst David Konrad downgraded Citigroup to “neutral” from “outperform”.

Macquarie also believes Citi’s global payments business could be hurt by global events such as Brexit and Trump’s presidential victory.

Citibank NYSE: C closed Friday Jan 13 at 59.63 +0.40 +0.68%. The 52-week range is 34.52 - 61.63 on Average Volume of 21,307,209.

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25
Breaking News / What to Expect From Morgan Stanley $MS Earnings This Week
« on: January 15, 2017, 11:53:02 AM »
Morgan Stanley (MS) reports fourth-quarter results on Jan. 17 before the market opens. MS follows Bank of America (BAC) , Wells Fargo (WFC) and JPMorgan (JPM) along with the other money center major banks  Citibank (C) and Goldman Sachs (GS) with another big bankers earnings week. Since Donald Trump won on Election Day there has been a huge run higher on MS and the other bank stocks. Trading income was the biggest surge for most banks in Q4 and $MS looks to have the biggest jump in total trading revenue at 23% versus a year earlier estimates Deutsche Bank analyst Matt O'Connor.

Morgan Stanley Consensus Forecast
 

Morgan Stanley earnings per share (EPS) expected to rise 51% to $0.65 from $0.43 a year ago according to consensus data from Thomson Reuters. Analysts expect revenue of $8.35 billion for the quarter. On average analysts expect MS $2.76 EPS for the current fiscal year and $3.30 EPS for next fiscal year.

The bank rally has been fueled by expectations for easier regulations including a possible repeal of DoddFrank and infrastructure spending. The Federal Reserve decision to raise rates has also helped banks.  The new surge in home prices has also buoyed optimism for the banking business and banks profits thereto.

Morgan Stanley's trading business stands to also benefit should the economy rebound along with rising interest rates, which could help its lending spreads. Corporate tax savings would also aid profitability. Morgan Stanley has also been aggressively cutting expenses back in in January the bank laid off a number of senior investment bankers and cut bonuses 15% after the Jan. 1 start date of new pay packages reconfigured with new incentives.



Analysts will be watching for comments on China according to the Wall Street Journal.  The paper reported MS reportedly is planning to up its stake later this year to 49% with its joint-venture partners in China in "a sign of good faith to the Chinese government," .. "will open up over time and offer opportunities,"



Source: MarketBeat

What Analysts Think

SocGen analyst Andrew Lim raised Morgan Stanley’s price target to $60.0 from $22.5.

SocGen upgraded Morgan Stanley along with Bank of America Corp  and UBS Group AG (USA) to Buy as it believes in the “Trump Effect” to  increase net interest income, lower corporate taxes and allow for the return of excess capital. Trump’s proposed fiscal stimulus has steepened the U.S. yield curve.

“The increase in earnings will likely be significant for some banks, in our view, more than justifying the recent rally in share prices for US-centric banks,” Lim wrote in a note. he added “We see Trump’s policies as supportive of FX trading
going forward, amplified by ongoing macro-political volatility in Europe and emerging markets.”

Lim also highlighted  Morgan Stanley, Citigroup Inc and BofA as having the most excess capital and using it to buy back shares could boost EPS by 26 percent, 21 percent and 10 percent respectively.

Morgan Stanley NYSE: MS closed Friday Jan 13 at 43.81+0.18 +0.41%. The 52-week range is 21.16 - 44.60 on Average Volume of 12,138,877. Over the three months ended Dec 31, 2016 Morgan Stanley stock was up almost 37%.

More Earnings News
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 

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