Will Huntington Bancshares Post Blowout Earnings?

2013 is here, and earnings season has already started ramping up. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction that turns out to be exactly the wrong move to the news.

Let's turn to Huntington Bancshares (NASDAQ: HBAN  ) . Regional banks like Huntington did a better job of weathering the financial crisis than their larger peers, but that hasn't left them entirely unscathed by the experience. Let's take an early look at what's been happening with Huntington Bancshares over the past quarter and what we're likely to see in its quarterly report Thursday morning.

Stats on Huntington Bancshares

Analyst EPS Estimate

$0.17

Change From Year-Ago EPS

21%

Revenue Estimate

$704 million

Change From Year-Ago Revenue

9.2%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Can you bank on Huntington Bancshares' earnings?
Analysts are pretty optimistic about Huntington Bancshares and its prospects for a favorable quarterly report. With stable projections and calls for pretty substantial expansion on its top line, the bank could be poised to help its stock recover from a 7.5% loss over the past three months.

The key for Huntington's success will be whether the bank can maintain its net interest income margins. Although net interest income plays a fairly big role at Bank of America (NYSE: BAC  ) , JPMorgan Chase (NYSE: JPM  ) , and Wells Fargo (NYSE: WFC  ) , those three behemoths also get a sizable component of their revenue from fee income, as well as non-core operations like securities, asset management, and in some cases investment banking. By contrast, Huntington gets two-thirds of its total revenue from net interest income, making the Federal Reserve's interest rate policies extremely important. As margins have gotten squeezed from the Fed's Operation Twist program, Huntington in particular has felt the pinch.

Still, that hasn't stopped American Banker Banker of the Year award winner Stephen Steinour from taking advantage of the situation. Rather than retreating, the CEO has pushed Huntington to expand its automotive lending division and to hire business bankers even as competitors were doing big layoffs.

As important as quarterly results are, investors will also look for signs of imminent merger activity. With Hudson City Bancorp (NASDAQ: HCBK  ) having been bought out by M&T Bank and several other high-profile buys of bank assets, Huntington could be either a smart acquirer or a potential target from a big bank. Either way, Huntington looks like a promising way to invest despite a tough banking environment right now. 

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