Should You Be Concerned With Berkshire Hills Bancorp Inc’s (NYSE:BHLB) -6.21% Earnings Drop?
Measuring Berkshire Hills Bancorp Inc’s (NYSE:BHLB) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess BHLB’s recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Berkshire Hills Bancorp
Was BHLB’s weak performance lately a part of a long-term decline?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to assess different companies in a uniform manner using new information. For Berkshire Hills Bancorp, its latest trailing-twelve-month earnings is US$55.03M, which, relative to last year’s figure, has fallen by -6.21%. Given that these values are relatively myopic, I have computed an annualized five-year value for BHLB’s earnings, which stands at US$39.94M This shows that though earnings declined from the previous year, over a longer period of time, Berkshire Hills Bancorp’s earnings have been growing on average.
How has it been able to do this? Let’s see if it is only attributable to industry tailwinds, or if Berkshire Hills Bancorp has experienced some company-specific growth. In the past few years, Berkshire Hills Bancorp increased its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the US banks industry has been growing, albeit, at a unexciting single-digit rate of 4.21% over the past year, and 8.38% over the past half a decade. This means that any near-term headwind the industry is experiencing, it’s hitting Berkshire Hills Bancorp harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors affecting its business. You should continue to research Berkshire Hills Bancorp to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BHLB’s future growth? Take a look at our free research report of analyst consensus for BHLB’s outlook.
2. Financial Health: Is BHLB’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
