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Santander Consumer (SC) Lags on Q4 Earnings, Costs Rise

Zacks Equity Research

Have you been eager to see how Santander Consumer USA Holdings Inc. SC performed in Q4 in comparison with the market expectations? Let’s quickly scan through the key facts from this Texas-based technology-driven consumer finance company’s earnings release this morning:

An Earnings Lag

Santander Consumer came out with adjusted earnings per share of 27 cents, lagging the Zacks Consensus Estimate of 30 cents. Results exclude the impact of the tax reform and other tax related items, legal reserves, and a settlement with the former CEO.

Elevated expenses and lower net finance and other interest income were recorded.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Santander Consumer reflect a neutral stance prior to the earnings release. The Zacks Consensus Estimate of 30 cents remained stable over the last 30 days.   

Santander Consumer has a decent earnings surprise history. The company had an average positive beat of 2.8% in the trailing four quarters.

Santander Consumer USA Holdings Inc. Price and EPS Surprise
 

Santander Consumer USA Holdings Inc. Price and EPS Surprise | Santander Consumer USA Holdings Inc. Quote

Revenues

Santander Consumer posted revenues of $971.8 million, which declined 10.3% year over year. The Zacks Consensus Estimate for revenues was $1.58 billion.

Key Stats to Note:

  • Total auto originations during the quarter: $4.3 billion
  • Net interest margin: 10.2%
  • Return on average equity: 38.5%
  • Return on average assets: 6.0%


What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #2 (Buy) for Santander Consumer. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look unfavorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

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