Big Monday For Financials

By Billy Fisher | April 14, 2011 AAA

A number of companies will be reporting their Q1 earnings next week, now that the earnings season is kicking into high gear. Investors will be especially fixated on the financial sector on Monday, given some of the names that will be announcing their quarterly results. Here is what investors can expect coming out of the gates next week.

TUTORIAL: The Industry Handbook: The Banking Industry

Life in the Big Citi
Prior to the market open on Monday, Citigroup (NYSE:C) is expected to report Q1 EPS of 10 cents, versus 15 cents in the year-ago quarter. Total revenue is expected to fall by 18.7%. Shares of C have declined by 5% so far this year.

Last quarter, Citigroup swung to a profit of 4 cents per share from a loss of 33 cents in the company's Q4 in 2009. The firm is coming off of its fourth consecutive profitable quarter and its international consumer banking business has been prospering. Citigroup's corporate loan portfolio has also been improving, and investment banking revenues have spiked due to increased equity underwriting activity.

M&T Bank (NYSE:MTB) is also slated to announce its quarterly results on Monday. Analysts are predicting that the company will report a 22.6% pop in EPS on a 3.5% improvement in total revenue versus the year ago quarter. Year-to-date, shares of MTB have been virtually flat in 2011.

Key to a Turnaround
The money center bank KeyCorp (NYSE:KEY) will check in with its Q1 results before the opening bell on Monday. Wall Street is projecting that the company will report EPS of 14 cents, compared to a loss of 11 cents for Q1 in 2010.

KeyCorp is coming off of a profitable Q4 that benefited from lower credit costs as well as a decline in nonperforming assets. The company recently used equity and debt offerings to raise proceeds that helped to finance the repurchase of TARP capital owned by the Treasury Department. Shares of KEY are flat on the year. (To learn more about government bailouts, see Top 6 U.S. Government Financial Bailouts.)

Two other stocks in the financial sector that are worth keeping an eye on, on Monday are the brokerages of Raymond James Financial (NYSE:RJF) and TD Ameritrade (Nasdaq:AMTD). Both companies are expected to announce significant upswings in earnings fueled by high single-digit top line growth. Shares of RJF and AMTD are up 15% and 12% year-to-date, respectively.

The Bottom Line
Monday will be a big day for investors with money in the financial sector. Analysts are calling for sizable improvements in earnings from the companies expected to report their quarterly results. Revenue growth out of these companies should be moderate, but the overall landscape is much brighter than it was at this time last year.

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