Earnings Preview: More Banks Reporting Thursday

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 |  Includes: ASB, AXP, BBT, EWBC
by: Robert Weinstein

American Express Company (NYSE:AXP) is scheduled to release last fiscal quarter's results after the closing bell on January 19, 2012. Let's take a look at how American Express Company has done in recent quarters.

American Express Company, together with its subsidiaries, provides charge and credit payment card products, and travel-related services worldwide. The company was founded in 1850 and is headquartered in New York, New York. AXP trades an average of 5.4 million shares per day.

52 Week High: $53.80
52 Week Low: $41.30
Book Value: $15.48
Float Short: 0.74%

On average, 16 analysts are expecting a drop of $-0.05 in earnings per share compared to last quarter's results of $1.03. The estimated mean earnings are $0.98 per share. Analyst estimates range between $0.83 and $1.16 per share.

The current trailing twelve month P/E ratio is 12.4. The forward P/E ratio is 11.9. "The Card" is doing very well in front of earnings. The moving averages are all trending upward and the stock broke through a large resistence area. It would not surprise me for American Express to trade and test the $52 range, especially if they beat. North American and Europe may not be all that strong, but Asia in general is still growing (even if not as fast as expected in the Middle Kingdom).

If you already own this stock and you want to protect some of your gains, you may want to look into an option call write. This is where you will write call options against some or all of your shares. The premium is especially rich in front of earnings, and you can lock down part of your gains. You will also mitigate some of the volatility in the process, which may be enough for some to consider this strategy.

The bottom line has rising earnings year-over-year of $4.06 billion for 2010 vs. $2.13 billion for 2009.

Gross reported revenue compared to the mean estimate (rounded):

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Sep-11 $ 7.58 B $ 7.57 B $ -10.21 M -0.13%
Jun-11 $ 7.35 B $ 7.62 B $ 265.86 M 3.62%
Mar-11 $ 6.99 B $ 7.03 B $ 44.48 M 0.64%
Dec-10 $ 7.29 B $ 7.32 B $ 28.47 M 0.39%
Sep-10 $ 6.80 B $ 7.03 B $ 232.03 M 3.41%
Click to enlarge

M = millions, B = billions.
Differences are rounded.
Some one-time items are often excluded in reported EPS.

paid2trade.com Quarterly Estimates And Actual EPS results AXP Click to enlargeReported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for AXP:

paid2trade.com short interest tool. The total short interest number of shares for AXP Click to enlarge

The number of days to cover short interest based on average daily trading volume for AXP:

paid2trade.com number of days to cover short interest based on average daily trading volume for AXP Click to enlarge

BB&T Corporation (NYSE:BBT)
is expected to report earnings for last fiscal quarter before the opening bell on January 19, 2012.

BB&T Corporation operates as a financial holding company for Branch Banking and Trust Company that provides banking and trust services to individuals and businesses. The company was founded in 1906 and is headquartered in Winston-Salem, North Carolina. BBT trades an average of 4.4 million shares per day.

52 Week High: $29.59
52 Week Low: $18.92
Book Value: $25.07
Float Short: 1.80%

Analysts are expecting an improvement of $0.01 in earnings per share compared to last quarter's results of $0.52. The number to beat is $0.53 per share, based on the estimated mean earnings. Analyst estimates range between $0.45 and $0.65 per share.

The P/E ratio has been under pressure, as the current trailing twelve months P/E ratio is 17.2, while the forward P/E ratio is now 11.53. It will be interesting to see if pricing is currently at a discount, or if the market has been correct to price in lower growth expectations.

Much like American Express, BB&T has been on a strong run recently. The shorter time major moving averages are trending higher, and while the 200 is not moving higher yet, it appears to have found support. Investors wishing to lock in some gains in front of earnings will find premiums relatively rich. Currently the $30, $32.50, and $35 strike prices have good liquidity. If you're comfortable letting your shares go for any of those prices, you may want to look into writing calls against some or all of your shares.

The bottom line has falling earnings year-over-year of $816.00 million for 2010 vs. $853.00 million for 2009.

Gross reported revenue compared to the mean estimate (rounded):

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Sep-11 $ 2.19 B $ 2.14 B $ -41.82 M -1.91%
Jun-11 $ 2.15 B $ 2.14 B $ -5.59 M -0.26%
Mar-11 $ 2.19 B $ 2.04 B $ -153.99 M -7.03%
Dec-10 $ 2.21 B $ 2.30 B $ 81.19 M 3.67%
Sep-10 $ 2.24 B $ 2.42 B $ 183.80 M 8.2%
Click to enlarge

M = millions, B = billions.
Differences are rounded.
Some one-time items are often excluded in reported EPS.

paid2trade.com Quarterly Estimates And Actual EPS results BBT Click to enlargeReported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for BBT:

paid2trade.com short interest tool. The total short interest number of shares for BBT Click to enlarge

The number of days to cover short interest based on average daily trading volume for BBT:

paid2trade.com number of days to cover short interest based on average daily trading volume for BBT Click to enlarge

Associated Banc-Corp
(ASBC) is due to report earnings after the closing bell on January 19, 2012. Below we can see the results of Associated Banc-Corp over the last few earnings periods.

Associated Banc-Corp, a bank holding company, offers various banking and financial services to individuals and businesses primarily in Wisconsin, Illinois, and Minnesota. The company was founded in 1964 and is based in Green Bay, Wisconsin. ASBC trades an average of 1.5 million shares per day.

52 Week High: $15.20
52 Week Low: $8.74
Book Value: $16.33
Float Short: 2.26%

Analysts are expecting an improvement of $0.03 in earnings per share compared to last quarter's results of $0.20. The reporting quarter's estimated mean earnings are $0.23 per share. Analyst estimates range between $0.20 and $0.25 per share.

The P/E ratio has been under pressure, as the current trailing twelve months P/E ratio is 25.6, while the forward P/E ratio is now 13.92. An upside earnings report may put a lot of wind in the sails, especially with the recent breakthrough of the 200-day moving average. A fall back under would not be all that scary if it tests it again quickly. Usually the first breakthrough doesn't make it, so having a tight stop-loss may not work right now.

The bottom line has rising earnings year-over-year of $-0.86 million for 2010 vs. $-131.86 million for 2009.

Gross reported revenue compared to the mean estimate (rounded):

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Sep-11 $ 234.77 M $ 224.84 M $ -9.93 M -4.23%
Jun-11 $ 225.49 M $ 218.88 M $ -6.61 M -2.93%
Mar-11 $ 234.64 M $ 225.90 M $ -8.74 M -3.72%
Dec-10 $ 238.32 M $ 235.56 M $ -2.76 M -1.16%
Sep-10 $ 238.65 M $ 235.80 M $ -2.85 M -1.19%
Click to enlarge

M = millions, B = billions.
Differences are rounded.
Some one-time items are often excluded in reported EPS.

paid2trade.com Quarterly Estimates And Actual EPS results ASBC Click to enlargeReported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for ASBC:

paid2trade.com short interest tool. The total short interest number of shares for ASBC Click to enlarge

The number of days to cover short interest based on average daily trading volume for ASBC:

paid2trade.com number of days to cover short interest based on average daily trading volume for ASBC Click to enlarge

East West Bancorp, Inc. (NASDAQ:EWBC)
is scheduled to release last fiscal quarter's results before the opening bell on January 19, 2012. The company was founded in 1998 and is headquartered in Pasadena, California.

52 Week High: $23.79
52 Week Low: $13.94
Book Value: $15.18
Float Short: 2.46%

According to EDGAR Online, on average, 15 analysts are expecting the same in earnings as the last quarter of $0.41. The reporting quarter's estimated mean earnings are $0.41 per share. Analyst estimates range between $0.40 and $0.43 per share.

The P/E ratio has been recently discounted, as the current trailing twelve months P/E ratio is 15.4, while the forward P/E ratio is now 12.1. It appears based on the lower PE that investors are pricing in less growth. Not a big surprise given the company earnings are basically flatlined. The moving averages are painting a bullish picture though. The recent breakthough of the 60-day above the 200-day moving average is encouraging.

Investors wanting to lock in the recent gains can look at the $20 and 22.50 strike call options as having the most volume traded. There just is not a lot of volume, so if you do want to hedge, it would be wise to try to put a limit order in around the middle of the bid/ask spread. Otherwise you will likely get killed on the spread.

The bottom line has rising earnings year-over-year of $164.56 million for 2010 vs. $76.64 million for 2009.

Gross reported revenue compared to the mean estimate (rounded):

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Sep-11 $ 208.92 M $ 237.78 M $ 28.86 M 13.81%
Jun-11 $ 193.19 M $ 227.34 M $ 34.15 M 17.68%
Mar-11 $ 194.33 M $ 208.83 M $ 14.50 M 7.46%
Dec-10 $ 189.29 M $ 246.56 M $ 57.27 M 30.26%
Sep-10 $ 202.32 M $ 182.80 M $ -19.52 M -9.65%
Click to enlarge

M = millions, B = billions.
Differences are rounded.
Some one-time items are often excluded in reported EPS.

paid2trade.com Quarterly Estimates And Actual EPS results EWBC Click to enlargeReported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for EWBC:

paid2trade.com short interest tool. The total short interest number of shares for EWBC Click to enlarge

The number of days to cover short interest based on average daily trading volume for EWBC:

paid2trade.com number of days to cover short interest based on average daily trading volume for EWBC Click to enlarge

I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, and Yahoo Finance for most of my data. I use the confirmed symbols from earnings.com that I believe to be of the most interest.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.