SunTrust Banks, Honeywell International And Morgan Stanley Release Earnings
Because of mortgage revenue headwinds and negative impact by the resolution of legal matters (most notably repurchase settlements reached with companies Freddie Mac and Fannie Mae), SunTrust Banks, Inc. (NYSE: STI) offered relatively lackluster results for the third-quarter of 2013. Net income available to common shareholders was $179 million, or $0.33 per average common diluted share, which was negatively affected by $0.33 per share due to legal issues. This is compared to $365 million, or $0.68 a share in the second-quarter of this year and $1.066 billion, or $1.98 per share in the third-quarter of 2012. Earnings per share, excluding significant items impacting the just finished quarter and the third-quarter of last year, increased 14 percent compared to last year. Net interest income was noticeably unchanged comparative to Q2 as six basis points of net interest margin compression was offset by growth in average earning assets of 0.5 percent. Although average commercial and industrial loan balances were flat compared to last quarter, they were up 10 percent from a year earlier, to $54.666 billion.
This morning, Honeywell International, Inc. (NYSE: HON) revised the low end of its guidance for adjusted earnings for the year by $0.05. The company now expects a range of $4.90 to $4.95 a share. HON also lowered its revenue estimates to between $38.8 billion and $39 billion, from $38.9 billion to $39.3 billion. Honeywell reported a profit of $990 million, or $1.24 a share, up from $950 million, or $1.20 a share, a year earlier. Sales grew 3.3 percent to $9.65 billion. Analysts expected earnings of $1.24 a share and revenue of $9.92 billion. Operating margins improved satisfactorily to 15.2 percent from 13.9 percent. Honeywell is a highly diversified company that provides products and services for the aerospace sector, as well as for businesses and homes. Because of its close ties with the aerospace industry, it has faced significant headwinds this year with sequestration issues and the government shutdown, but has managed to rise above them nicely.
Financial services company Morgan Stanley (NYSE: MS) beat expectations on earnings this morning with third-quarter revenue bouncing up by a hefty 50 percent. Higher income from equities sales and a briskly growing wealth management business are pegged as the reasons for the jump. Revenue in MS’s wealth management business increased 8 percent to $3.48 billion. The company had net income of $888 million, or $0.44 per share from continuing operations. That’s compared with a loss of $1 billion, or $0.55 per share in the same quarter in 2012. Overall revenue rose to $7.93 billion, from $5.28 billion the year-ago quarter. On a side note, the company completed its acquisition brokerage Smith Barney from Citigroup (NYSE: C) in the quarter and now collects all of the earnings from the venture. It now must wait until 2015 to add all of Smith Barney’s client deposits to its balance sheet.
Disclosure: The author has no position in the stocks mentioned in this article, and does not intend to initiate any position in the next 48 hours.
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