What to Expect When Regions Financial (RF) Reports Earnings on Tuesday

NEW YORK (TheStreet) -- Regions Financial  (RF) reports its second-quarter earnings before the bell on Tuesday, and here's what analysts are expecting from the bank.

The consensus estimate calls for the company to report earnings of 21 cents a share on revenue of $1.29 billion. Regions Financial reported EPS of 20 cents, which came up short of the consensus estimate of 22 cents, on revenue of $1.254 billion in the first quarter.

The stock was down 0.88% to $10.16 at 2:48 p.m. on Monday.

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Separately, TheStreet Ratings team rates REGIONS FINANCIAL CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate REGIONS FINANCIAL CORP (RF) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 93.71%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 23.89% trails the industry average.
  • REGIONS FINANCIAL CORP's earnings per share declined by 8.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REGIONS FINANCIAL CORP increased its bottom line by earning $0.78 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.78).
  • RF, with its decline in revenue, slightly underperformed the industry average of 5.1%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, RF has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Net operating cash flow has significantly decreased to $421.00 million or 62.74% when compared to the same quarter last year. Despite a decrease in cash flow REGIONS FINANCIAL CORP is still fairing well by exceeding its industry average cash flow growth rate of -98.56%.
  • You can view the full analysis from the report here: RF Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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