Q: May I have your comments on FN’s earnings please
5i Research Answer:
EPS of 39c missed estimates of 75c. Revenue of $172M missed estimates of $209M. Q1 results were very weak due to lower-than-expected revenue and cost inflation. This was the weakest quarter in three years. Net interest margins have compressed and there were lower third-party underwriting revenues. Total assets did increase 14%. The company remains more positive, and expects Q2 orgination growth to exceed Q1. Still, investors will likely take a cautious approach here, trying to ascertain whether the weakness is temporary or structural. There are economic challenges ahead. The valuation remains good here and we have faith in the company overall, but this was certainly a very weak quarter.