East West Bancorp Earnings Preview

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Investors hope East West Bancorp (NAS: EWBC) will top analyst estimates once again after beating predictions by $0.02 in the previous quarter. The company will unveil its latest earnings on Wednesday, Oct. 19. East West Bancorp is a registered bank holding company that offers a full range of banking services to individuals and small to mid-size businesses through its subsidiary bank, East West Bank, and its subsidiaries.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back East West Bancorp, with 10 of 14 rating it a buy and the remainder rating it a hold. Analysts like East West Bancorp better than competitor First Republic Bank overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $205.8 million in revenue this quarter. That would represent a rise of 12.6% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.39 per share. Estimates range from $0.36 to $0.41.

What our community says:
The majority of CAPS All-Stars see EWBC as a good bet, with 57.8% assigning it an "outperform" rating. The majority of Fools are in agreement with the All-Stars, for 64.9% give it an "outperform" rating. Fools have embraced East West Bancorp, though the message boards have been quiet lately with only 97 posts in the past 30 days. East West Bancorp's bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
East West Bancorp's income has fallen year over year by an average of 13.8% over the past five quarters. A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue rose 0.8% in the second quarter and fell 21% in the first quarter and 52.9% in the fourth quarter of the last fiscal year.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters. 

QuarterQ2Q1Q4Q3
Net Margin19.8%19.8%15.5%17.9%
For all our East West Bancorp-specific analysis, including earnings and beyond, add East West Bancorp to My Watchlist.

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