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Axos Financial Rises Nearly 6% After Hours on Q3 Beats

By Eric Volkman - Apr 29, 2020 at 6:16PM

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Unusually for a bank this earnings season, this one managed to increase its net profit.

Axos Financial (AX 1.86%) was an after-market trading star on Wednesday, following the release of its Q3 of fiscal 2020 results late that afternoon.

The company bucked the general trend for banks this earnings season, in that its profitability actually rose on a year-over-year basis. Specifically, non-GAAP (adjusted) net profit increased by almost 12% to just under $57.7 million, or $0.91 per diluted share. That was on the back of a 16% increase in total revenue, to $180.2 million, helped by nearly 11% growth in net loans and leases, plus a 6.5% improvement in total deposits.

Bank card on PC keyboard.

Image source: Getty Images.

There is one caveat to those results. While Axos -- like numerous other banks coping with the economic damage caused by the SARS-CoV-2 coronavirus outbreak -- increased its loan-loss provisions in Q3, that lift was by a relatively modest 50%. Peer lenders have shored up this line item at far higher rates in anticipation of widespread defaults by borrowers.

All the same, Axos' numbers topped analyst projections. On average, prognosticators following the stock were modeling an adjusted per-share net profit of $0.89 on revenue of slightly more than $156.4 million.

Axos is a lender that benefits greatly on the costs side by having no physical branches. A relatively young company, it's still on a growth path and has expanded in recent years by pushing into segments such as jumbo mortgages and industrial loans.

As of this writing, Axos' shares were up by 5.8% in post-market action. During the day on Wednesday, they comfortably exceeded the gains of the top equities indexes by trading 8.3% higher.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Axos Financial, Inc. The Motley Fool has a disclosure policy.

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