Cleveland-Cliffs stock soars, Zions Bancorp rises with results from GM, Netflix on deck

Shares of Zions Bancorporation (ZION) rose 3% in after-hours trading after the bank suggested that a large loss during the quarter was limited to a couple of faulty loans and not a sign of widespread credit stress.

Zions stock dropped 13% in one day last Thursday after the regional bank disclosed it filed a lawsuit to recoup $60 million from investment funds Cantor II and Cantor IV. At the same time, another regional bank, Western Alliance (WAL), sued another Cantor fund for alleged fraud. However, commentary from several regional lenders in recent days has largely calmed the market’s jitters about credit quality.

“The quarter’s credit results were marred by a $50 million charge-off, and a $10 million specific reserve established against the approximate remaining balance, arising from loans to two related companies in which apparent irregularities and misrepresentations were recently detected,” CEO Harris Simmons said in Zions’ earnings release.

“Legal action has been initiated to pursue recovery of the amounts owed from guarantors of the credits. Excluding this loss, remaining net charge-offs were very benign at $6 million, or 4 basis points of average loans on an annualized basis.”

Zions reported that net interest income rose 8% year over year to $672 million while the bank’s provision for credit losses rose to $49 million, compared with $13 million the previous year, primarily due to the specific charge-offs.

Diluted earnings per share of $1.48 beat estimates for $1.40 per share, according to S&P Global Market Intelligence.

Yahoo Finance’s Jake Conley reports:

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The earnings season is starting to pick up steam, with 13% of S&P 500 companies reporting this week. So far, investors have seen more positive earnings surprises than usual, but signs of worry still abound, according to Bank of America analysts.

The analysts estimated that 76% of S&P 500 companies that have shared results so far have reported earnings beats, which is ahead of the week one average of 68%. The artificial intelligence arms race and capital expenditures cycle remain strong themes, they noted.

Slated to report earnings this week are Netflix (NFLX), Tesla (TSLA), Procter & Gamble (PG), General Motors (GM), and Ford (F), among others. That tees up a rush of earnings the following week, with 44% of S&P 500 companies reporting in the final week of October (see chart below).

Ally Financial (ALLY), a digital bank and auto financing company, said it’s not seeing significant deterioration in its subprime lending business.

“We’re observing consumer behaviors that are honestly better than our expectations,” Ally CEO Michael Rhodes said on the company’s third quarter earnings call. “And I appreciate there’s a lot of macro uncertainty in the environment, but we’re not seeing that impact our credit performance.”

In Q3, Ally reported earnings per share of $1.18, topping estimates for $0.96 per share, according to S&P Global Intelligence. Revenue of $2.17 billion also surpassed expectations for $2.10 billion.

The lender received a record 4 million auto financing applications during the quarter. Its auto net charge-off rate — or debt the company is owed that is unlikely to be repaid — fell by 36 basis points year over year to 1.88%, below the 2.24% charge-off rate in Q3 2024.

Listen to a replay of the earnings call here.

Truist (TFC) stock rose 1.5% in premarket trading as the Charlotte, N.C.-based bank recorded a rise in third quarter profit on Friday.

Net income rose to $1.3 billion, representing $1.04 per diluted share, which exceeded Wall Street analyst estimates of $0.99 per share. Noninterest income increased 11% to $158 million, versus the second quarter, due to greater activity in investment banking, trading, and wealth management.

The bank said it saw broad-based loan growth during the quarter, while average deposits decreased 1%.

It also noted that loans that were 90 days or more past due rose by 1 basis point quarter over quarter, totaling $584 million at the end of September. In general, regional bank earnings eased some of the market’s concerns about credit stress on Friday after Zions (ZION) and Western Alliance (WAL) alleged fraud on some of their loans.

Comerica (CMA) stock fell slightly in premarket trading, as the bank reported generally steady operations but a decline in noninterest income ahead of its takeover by Fifth Third.

Net interest income grew over 7% to $574 million in the third quarter. Loans remained relatively stable at $50.8 billion, while deposits increased $1.5 billion to $62.7 billion. Noninterest income dipped to $264 million as capital markets income slowed.

At the end of September, provisions for credit losses totaled $725 million. On credit quality, Comerica CEO Curtis Farmer noted a slightly improved economic forecast.

“Our proven credit discipline and prudent underwriting continued to deliver results with net charge-offs of 25 basis points, still within the low end of our normal range,” Farmer said. “Economic conditions modestly improved and migration remained manageable, driving a slight decline in our allowance for credit reserves to 1.43% of total loans.”

On Oct. 6, Comerica announced it had entered an agreement to be acquired by Fifth Third Bank (FITB). You can view that bank’s results in the blog post below.

Ohio-based regional bank Fifth Third (FITB) reported earnings that exceeded expectations on Friday as investors became jittery over the credit health of smaller banks.

Fifth Third’s net interest income hit $1.52 billion in Q3, a 7% increase year over year. Earnings per share grew 17% annually to $0.91, beating estimates of $0.86.

The bank’s provisions for loan losses increased 23% year over year to $197 million.

“Total average portfolio loans and leases of $123 billion remained stable compared to the prior quarter,” the company said. “Average commercial portfolio loans and leases of $75 billion decreased 1%, due to declines in commercial mortgage and commercial construction loans, partially offset by increases in C&I middle market loans. Average consumer portfolio loans of $48 billion increased 2%, driven by continued strong growth in indirect secured consumer and home equity loans.”

Interactive Brokers (IBKR) stock climbed 1% after the company reported a boost in client trading volume and robust third quarter earnings.

The electronic brokerage stated that its customer accounts increased 32% to 4.13 million, which led to growth in overall trading volume during the quarter. Positive overall market sentiment helped boost trading as well, as investors bought dips and participated in rallies, the company said in its Q3 earnings call.

In total, commission revenue increased 23% year over year to $537 million during the quarter, while net interest income rose 21% to $967 million.

Earnings per share of $0.59 topped Wall Street analysts’ estimates for earnings of $0.53 per share. Revenue was also well above expectations, with the quarter’s $1.65 billion exceeding estimates of $1.52 billion.

Listen to the earnings call live here.

CSX (CSX) reported better-than-expected profits and revenue for the third quarter, as declines in coal prices and merchandise volume were partially offset by intermodal volume growth and higher prices in other merchandise.

The Jacksonville, Fla.-based freight railroad operator posted earnings per share of $0.44, compared to analysts’ expectations for $0.42 per share, according to S&P Global Market Intelligence.

Revenue declined 1% year over year to $3.59 billion for the quarter, although the metric still exceeded expectations of $3.57 billion.

Volume totaled 1.61 million units for the quarter, up 1% annually, though the operating margin shrank to 30.3% from 37.4% in the same period a year ago.

CSX stock rose 3% in after-hours trading

U.S. Bancorp (USB) reported net income of $2.00 billion, or $1.22 a share, in the third quarter, beating Wall Street estimates of $1.89 billion and rising from $1.72 billion in the same period last year.

Revenue reached a record $7.3 billion, ahead of estimates for $7.1 billion, according to S&P Global Market Intelligence, while net interest income rose 2% to $4.25 billion.

Provisions for credit losses reached $571 million in Q3, a 2.5% increase from $557 million in Q3 2024.

US Bancorp stock advanced 1.5% ahead of the opening bell.

Charles Schwab (SCHW) stock rose 4% in premarket trading after the financial services company reported earnings of $1.26 per share, beating Wall Street estimates by a penny.

Third quarter revenue also came in better than expected at a record $6.13 billion, a 27% increase year over year.

A dealmaking boom and stock market enthusiasm boosted the other major financial institutions that reported results earlier this week. At Charles Schwab, total client assets increased 17% year over year to a record $11.59 trillion, and net interest margin expanded by 21 basis points to 2.86%.

According to the company, a reduction in higher-cost liabilities, strong securities lending activity, and increased lending by clients helped boost net interest margins.

“Our unwavering focus on delivering for clients helped us attract $137.5 billion in 3Q core net new assets plus over 1 million new brokerage accounts for the fourth straight quarter,” CEO Rick Wurster said in the release.

Taiwan Semiconductor Manufacturing Co. (TSM) stock rose about 2% in premarket trading after the world’s biggest leading-edge chipmaker reported that profits surged 39% year over year in the third quarter.

What’s more, TSMC raised its revenue outlook for 2025 for the second time this year, as the chipmaker benefits from companies spending on artificial intelligence. TSMC sees mid-30% annual sales growth.

TSMC revenue beat estimates, coming in at 989.92 billion New Taiwan dollars (approximately $32.2 billion USD), compared to NT$967,146 estimated. Earnings per share of NT$17.44 (US$2.92 per ADR unit) also beat estimates of $2.60 per ADR unit.

Apple (AAPL), Nvidia (NVDA), and AMD (AMD) count among TSMC’s customers.

“Our business in the third quarter was supported by strong demand for our leading-edge process technologies,” TSMC CFO Wendell Huang said. “Moving into fourth quarter 2025, we expect our business to be supported by continued strong demand for our leading-edge process technologies.”

Yahoo Finance’s Pras Subramanian reports:

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Progressive (PGR) stock tumbled over 6% as of midday trading on Wednesday after the company’s earnings missed analyst expectations.

The insurance giant reported profits of $4.44 per share, underperforming Wall Street estimates for earnings of $5.30 per share. Revenue also fell short, with $21.3 billion reported versus the estimated $21.6 billion. Net income dropped 48% year over year.

Progressive experienced a $950 million expense in September due to a 2023 policy change in Florida that limits profits made on auto insurance.

“Despite actions to lower rates in the last year, it is probable that our personal auto profit in Florida for the 2023 to 2025 period will exceed the statutory profit limit that a Florida statute imposes…,” the company said. “In such event, we would need to credit any profit above the limit to all Florida personal auto policyholders active at December 31, 2025.”

Several regional bank stocks fell on Wednesday afternoon after the companies reported third quarter earnings and a stable

Shares of Citizens Financial Group (CFG) dropped 1%, while PNC (PNC) fell more than 3%. Memphis-based First Horizon (FHN) led the declines, with the stock dropping over 10%. First Horizon reported that deposits declined by $52 million year over year.

Pittsburgh-based PNC beat earnings estimates by $0.31, with profits per share of $4.35 compared to the Street’s expectations for earnings per share of $4.04, per S&P Global Market Intelligence. The regional bank reported that it expects net interest income to rise 1.5% in the fourth quarter but anticipates fee income will fall about 3%.

The stock reaction in regional banks juxtaposed the strength in the large Wall Street banks’ results and their stocks’ move higher. Bank of America (BAC) and Morgan Stanley (MS) shares were up 3% and 5%, respectively, on the back of a dealmaking boom and robust trading activity.

Additional regional banks, Fifth Third (FITB) and Comerica (CMA), will report earnings on Friday, providing investors with further clues about the state of household balance sheets. First Horizon CEO Bryan Jordan noted that the US economy, in the bank’s view, “continues to perform reasonably well.”

Third quarter profits at Morgan Stanley (MS) surged 45% as another Wall Street bank saw a robust quarter and benefited from a trading and dealmaking boom.

Morgan Stanley CEO Ted Pick called his bank’s quarter “outstanding” in an earnings statement. Morgan Stanley stock climbed nearly 4% in premarket trading.

Dealmaking fees at Morgan Stanley surged 44% from a year ago to $2.1 billion, Yahoo Finance’s David Hollerith reports. The bank advised on the Union Pacific-Norfolk Southern megadeal and co-facilitated the Keurig Dr Pepper (KDP) $18 billion acquisition of JDE Peet’s (JDEP.AS).

Trading also did well, with fees from the firm’s client trading division soaring 24%, driven by its stock transactions group. Morgan Stanley’s combined equity, fixed income, currency, and commodity trading for clients ballooned to $6.28 billion.

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