Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Santander Consumer USA Holdings Are Trading Higher Today

By Bram Berkowitz - Feb 4, 2021 at 2:54PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The bank's fourth-quarter and full-year earnings beat consensus, and the Federal Reserve terminated a long-standing enforcement action with the bank.

Shares of Santander Consumer USA Holdings (SC) traded as much as 11.4% higher this morning after the auto lender reported earnings that beat consensus estimates. It received some good regulatory news as well. 

So what

Santander recently reported net income of roughly $521.5 million, or $1.70 earnings per diluted common share, roughly 295% higher than the fourth quarter of 2019. For the full year, earnings in 2020 came in roughly flat compared with 2019. Both fourth-quarter and full-year earnings beat consensus estimates handily.

White car on an asphalt road

Image source: Getty Images.

Additionally, around 11:30 a.m. EST, the Federal Reserve announced that it had terminated an enforcement action with the company. The order had to do with deficiencies in Santander's compliance risk management program. Additionally, other federal and state authorities had previously cited violations against the company for breaching certain federal and state consumer compliance laws. The order had been in place since March 2017.

"I am pleased with the progress we have made resolving these legacy issues," Tim Wennes, CEO of Santander U.S., said in a statement. "Today's announcement is an important milestone for Santander in the U.S. and speaks to the hard work and dedication of our colleagues across the U.S. and particularly at SC."

Now what

Shares have fallen a good amount since the early-morning bump from earnings, but they were still trading higher than broader bank indexes. On the company's earnings call, management said it still views the current environment with uncertainty but sees reason to be optimistic and believes in its ability deliver value to our shareholders.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Santander Consumer USA Holdings Inc. Stock Quote
Santander Consumer USA Holdings Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.