From Dallas, Comerica Incorporated (CMA) reported early Tuesday its quarterly earnings of $144 million and an earnings per share of 73 cents, which shattered estimated EPS of 64 cents and was a 7 cent increase over the first quarter of 2012. In response, the stock lurched early Tuesday north of $31.60 per share before settling back down to be up about two-thirds of a point at $31 per share.
Cmpared to the second quarter of 2011, CMA posted a huge growth spurt, with net quarterly income of $144 million being 50 percent higher than in the same period of 2011 ($96 million) and the EPS of 73 cents being 38 percent better year-over-year. Commercial loans increased by 5 percent ($1.2 billion) over the previous quarter and has grown for eight consecutive quarters – resulting in a 20-percent increase year-over-year. Overall loans were up 2 percent ($959 million) over the previous quarter.
CEO Ralph W. Babb Jr. said, “Our second quarter results reflect our focus on the bottom line in this slow growing national economy. Loans continued to grow … (d)eposits continued to grow, credit quality remained solid, and we maintained our tight control of expenses. Our capital position remains a source of strength to support our future growth. We repurchased 2.9 million shares under our share repurchase program in the second quarter of 2012. In April, our Board of Directors increased the quarterly cash dividend 50 percent, to 15 cents per share. The combined share buyback and dividend returned 81 percent of second quarter net income to shareholders. Our consistent, conservative, relationship-focused approach to banking is making a positive difference for us and our customers.”
This news can be seen as a positive step to hedge funds like John Murphy’s Alydar Capital and Glenn Russell Dubin’s Highbridge Capital Management, both of which were new investors in CMA stock during the first quarter of 2012 while other funds were jettisoning some of their positions. Alydar had invested nearly $74 million in Comerica during Q1, while Highbridge jumped in with a nearly $24 million investment. Alydar was the top hedge-fund investor in Comerica in March, while Highbridge was No. 4. The funds between them, John Brennan’s Sirios Capital Management and Cliff Asness’s AQR Capital Management, had sold offr large portions of their stakes – Sirios shed 34 percent of its stake in Q1 while AQR dumped 43 percent.