Peek In Finance Stocks Q2 Earnings On Jul 29: CI, AON & More

The second-quarter earnings season is in full swing this week. So far, we have results from 208 S&P 500 members that combined account for 50.5% of the index’s total market capitalization as per the Earnings Trends report. Revenues are up 0.4% while earnings are down 4.7%. However, the beat ratio is 73.1% for the bottom line and 51.9% for the top line.

So far, 51.1% of the total Finance sector has come up with second-quarter results. Revenues are up 0.5% while earnings are down 4.6%. Eventually, the sector is expected to post an earnings decline of 1.4% in the second quarter and a revenue decline of 0.4%.

Let’s see what factors might have influenced its performance in the second quarter.

Earnings of the players in the Securities Exchange sector should benefit from the expansion of futures products in emerging markets and OTC offerings. Increased electronic trading volume will also add scale to the business.
Product diversity as well as innovative risk management provided by the players will continue to attract customers and drive revenues.

Nevertheless, a volatile interest rate environment, fluctuating currencies, and limited credit availability are expected to suppress customer demand, consequently hampering top-line growth. Also, intense competition might affect volumes of the players in the sector.

Another subsector — money transfer — will see earnings accretion from an increase in remittance volume, but a weak global economy might affect remittance in some parts of the globe. But growing digital capabilities might lead to an increase in overall remittance volume. Increased agent network, strategic tie-ups and partnerships to expand presence internationally may help this space to generate increased business.

Let’s find out what’s in store for four finance companies that will report second-quarter earnings results on Jul 29:

Cigna Corp. (NYSE:CI) is a global health services organization and offers commercial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverage to individuals in the U.S. In the last reported quarter, the company beat the earnings estimates by 6.91%. Cigna has an Earnings ESP of +1.67% as the Most Accurate estimate of $2.44 is above the Zacks Consensus Estimate of $2.40 per share. The company carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP.

We expect the company to continue posting favorable results on solid revenue growth in government business, disciplined expense management and effective medical cost management.

The company’s global supplements business is expected to drive earnings.

Favorable medical utilization along with medical cost management is also expected to contribute to the bottom line. Moreover, its strong balance sheet should support its results.

With respect to the surprise trend, the company posted a positive earnings surprise in each of the last four quarters, with an average beat of 5.93%. (Read more: Cigna to Report Q2: Will it Continue to Beat Estimates?)

CIGNA CORP Price and EPS Surprise

CIGNA CORP Price and EPS Surprise | CIGNA CORP Quote

Aon plc (NYSE:AON) headquartered in London, provides risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing services worldwide.

Last quarter, the company posted a positive earnings surprise of 1.50%. It has an Earnings ESP of +0.71% as the Most Accurate estimate of $1.41 is above the Zacks Consensus Estimate of $1.40 per share. The company carries a Zacks Rank #4 (Sell), which makes surprise prediction difficult.

The company is likely to witness an improvement in its underlying performance on the back of strategic investment decisions taken during the to-be-reported quarter.

Aon is likely to display solid organic growth across all major business segments due to its industry-leading platform of client-serving capabilities and vast investments in data and analytics. Also, global expansion through strategic acquisitions should contribute to inorganic growth.

With respect to the surprise trend, Aon delivered positive surprises in each of the last four quarters, with an average beat of 3.12%.(Read more:What’s in the Cards for Aon Plc this Earnings Season?)

AON PLC Price and EPS Surprise

AON PLC Price and EPS Surprise | AON PLC Quote

Moneygram International Inc. (NASDAQ:MGI) headquartered in Dallas, TX, provides money transfer and payment services in the United States and internationally. Last quarter, the company posted a positive earnings surprise of 54.6%. It has an Earnings ESP of -6.67% as the Most Accurate Estimate of 14 cents per share is below the Zacks Consensus Estimate of 15 cents per share. The company carries a Zacks Rank #1 (Strong Buy) but a negative Earnings ESP makes our surprise prediction difficult.

With respect to the surprise trend, Moneygram delivered positive surprises in each of the last four quarters, with an average beat of 17.6%.

MONEYGRAM INTL Price and EPS Surprise

MONEYGRAM INTL Price and EPS Surprise | MONEYGRAM INTL Quote

CBOE Holdings, Inc. (NASDAQ:CBOE) operates as an options exchange and creator of listed options in the United States. Last quarter, the company missed the earnings estimates by 1.61%. It has an Earnings ESP of -1.64% as the Most Accurate Estimate of 60 cents per share is below the Zacks Consensus Estimate of 61 cents per share. The company carries a Zacks Rank #3 but a negative Earnings ESP makes our surprise prediction difficult.

With respect to the surprise trend, CBOE Holdings delivered positive surprises in three out of last four quarters, with an average beat of 4.44%.

CBOE HOLDINGS Price and EPS Surprise

CBOE HOLDINGS Price and EPS Surprise | CBOE HOLDINGS Quote

Stay tuned! Check back on our full write-up on earnings releases of these stocks.