Huntington, M/I Homes post quarterly increases
Huntington Bancshares said Thursday that its second-quarter profit rose 3% from the same period of 2018, helped by an increase in loans and the sale of its retail branch offices in Wisconsin.
The bank reported a profit of $364 million, or 33 cents per share, for the three months that ended June 30, a penny ahead of analyst estimates. Revenue increased 6% for the same period to $1.2 billion.
“Our customers are extremely optimistic. They’re making investments. They’re borrowing money,” said Mac Mccullough, the CFO who handled the conference call with analysts because Steve Steinour, the bank’s chairman, president and CEO, is recovering from an injury he suffered while training for the Pelotonia charity bicycle ride next month. “There is a good economic outlook in our region in particular.”
While Huntington says the economy remains strong in the Midwest, where it operates, the Federal Reserve is on the verge of cutting interest rates amid slowing U.S. and global economies.
Huntington is forecasting two rate cuts between now and the end of the year. As a result, the bank is reducing its revenue outlook for the year with a forecast increase of 3 to 4.5%.
The bank is not anticipating a recession but is preparing, just in case, by
reducing expenses, delaying some initiatives and repositioning its portfolio of investments, Mccullough said.
The bank reported a 4% increase in commercial loans during the period and a 5% increase in consumer loans, including a 28% increase in recreational vehicle and boat lending.
“Our commercial customers continue to tell us that finding employees is their biggest challenge,” he said.
The company reported a $15 million gain in the quarter from the sale of its Wisconsin offices. The bank announced in December that it plans to sell the 32 offices to Associated Bank, based in Green Bay, Wisconsin.
Huntington acquired the offices as part of its 2016 purchase of Firstmerit, based in Akron.
Huntington shares rose 7 cents to $14.41 in trading Thursday.
M/I Homes
Shares of M/I Homes jumped Thursday after the Columbus-based homebuilder posted record second-quarter revenue and income Wednesday.
From April through June, M/I earned a record $30.2 million, or $1.08 a share, up from $27.9 million, or 96
cents a share, for the second quarter of 2018.
Earnings were well above analysts’ forecasts of 86 cents a share, pushing M/I’S shares up 4.5% in trading, rising $1.43 to $33.29.
Strong demand for homes pushed M/I’S revenue to a record $624 million for the quarter, up 12% from a year ago. M/I delivered 1,538 homes during the three-month span, 9% above the previous year and another record for the quarter.
Home sales rose in part because M/I was able to keep prices from rising. The average M/I home sold for $395,000 during the quarter, a notch below $396,000 a year ago.
M/I President and CEO Robert Schottenstein attributed the company’s robust results to “low mortgage rates and favorable consumer confidence.”
M/I ended the quarter with 220 active communities in its 16 markets, including Columbus and Cincinnati, up from 209 subdivisions a year earlier.
American Electric Power
More typical spring weather put a damper on American Electric Power’s second-quarter profit.
The power company said Thursday that its profit for the three months that ended June 30 fell nearly 13% to $461 million, or 93 cents per share. Revenue fell
10% to $3.6 billion.
“Our performance in the second quarter was positive, even without the boost from weather that we had last year,” Nick Akins, the company’s chairman, president and CEO, said in a statement. “Weather was back to normal this spring and has been much more moderate this year than in the first half of 2018.”
The spring of 2018 was cold, with winterlike temperatures into April followed by summertime temperatures in May. That boosted AEP’S sales of electricity.
Discounting one-time charges tied mostly to its acquisition of Sempra Renewables this year for $1.1 billion, AEP would have earned $493.6 million, or $1 per share, for the recent quarter.
Akins said the company’s profit outlook for the year remains on track despite lower demand for electricity because of tariffs and the strong dollar.
“The biggest economic headwind we have at this point is the impact of the trade war on the businesses in AEP’S service territory,” he told analysts on a conference call. “The increasing number of tariffs on goods beyond steel and aluminum have impacted export manufacturers in our service territory.”
The company also is continuing its move away from coal-fired generation to renewable sources of power. It announced last week that it plans to buy three wind-energy projects being developed in Oklahoma.
AEP shares fell 43 cents to $89.18 in trading Thursday.
Washington Prime Group
Washington Prime Group on Wednesday reported a key measure of profitability in its second quarter.
The real estate investment trust based in Columbus said it had funds from operations of $61.2 million, or 27 cents per share, in the April 1-June 30 period.
Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.
The company said it had a loss of $17.3 million, or 9 cents per share.
The trust posted revenue of $161.4 million in the period.
Washington Prime Group expects full-year funds from operations in the range of $1.16 to $1.24 per share.
The company’s shares rose 8 cents to $3.54 in trading Thursday.