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What's in the Cards for BNY Mellon (BK) in Q3 Earnings?

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The Bank of New York Mellon Corporation BK is scheduled to report third-quarter 2021 results on Oct 19, before market open. Its revenues and earnings in the to-be-reported quarter are expected to have witnessed a rise on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results were aided by provision benefits and higher fee income. Growth in assets under management (AUM) balance was another tailwind.

BNY Mellon has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a surprise of 6.9%, on average.

The Bank of New York Mellon Corporation Price and EPS Surprise

The Bank of New York Mellon Corporation Price and EPS Surprise
The Bank of New York Mellon Corporation Price and EPS Surprise

The Bank of New York Mellon Corporation price-eps-surprise | The Bank of New York Mellon Corporation Quote

The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at $1.02, which has increased 2% over the past 30 days. The estimate indicates a rise of 4.1% from the year-ago quarter’s reported number.

The consensus estimate for sales is pegged at $3.97 billion, indicating a 3.3% rise from the prior-year quarter’s reported figure.

Now, before we take a look at what our quantitative model predicts, let’s check the factors that are likely to have impacted BNY Mellon’s third-quarter performance.

Fee Revenues: Supported by overall asset inflows in the third quarter, BNY Mellon is expected to have recorded an improvement in total AUM balance. Thus, the related fee is likely to have increased in the quarter.

The Zacks Consensus Estimate for total investment services fee (comprising more than 50% of the company’s total revenues) is pegged at $2.12 billion, which indicates a rise of 2% from the previous quarter’s reported number.

The consensus mark for financing-related fees is pegged at $48.50 million, which suggests a 1% rise sequentially. The consensus estimate for distribution and servicing fees is pegged at $29 million, indicating 7.4% growth from the previous quarter’s reported figure.

However, the consensus estimate for foreign exchange revenues is pegged at $157 million, suggesting a decline of 14.7% sequentially. Nonetheless, the consensus mark for investment and other income of $90 million suggests a sequential rise of 1.1%.

Thus, the consensus estimate for total fees and other revenues is pegged at $3.34 billion, suggesting a marginal increase sequentially.

Net Interest Revenues: Unlike the past few quarters, the overall lending scenario improved slightly in the third quarter. Thus, despite the continued low interest-rate environment, BNY Mellon’s interest income is expected to have been positively impacted by decent growth in loans. The steepening of the yield curve is likely to have offered further support.

The company expects third-quarter 2021 fee waivers (net of distribution and servicing expenses) of $225 million. This will likely have a modest pre-tax benefit of $15 million.

Expenses: Because of higher litigation and restructuring charges, BNY Mellon’s expenses have been elevated over the past few years. Nevertheless, overall costs are expected to have been manageable in the quarter under review, given the elimination of unnecessary management layers.

What the Zacks Model Unveils

According to our quantitative model, the chances of BNY Mellon beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better — which is required to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for BNY Mellon is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Here are some finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.

Fifth Third Bancorp FITB is slated to report quarterly earnings on Oct 19. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +0.46%.

BankUnited, Inc. BKU is slated to report quarterly results on Oct 21. The company currently has an Earnings ESP of +1.90% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Capital One Financial Corporation COF is slated to report quarterly earnings on Oct 26. The company, which carries a Zacks Rank of 2 at present, has an Earnings ESP of +5.18%.


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BankUnited, Inc. (BKU) : Free Stock Analysis Report

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