Navient Likely to be Hurt by a Decline in Fee Income in Q3 Earnings

Core Insights - Navient Corporation (NAVI) is expected to report a decline in third-quarter 2024 revenues and earnings compared to the previous year [1] - The company has a history of earnings surprises, outperforming estimates in three of the last four quarters with an average surprise of 4.38% [1] Financial Performance Expectations - The consensus estimate for net interest income (NII) from Federal Education Loans is $49.3 million, reflecting a sequential decline of 7% [2] - The consensus estimate for NII from consumer lending is $122 million, indicating a sequential decline of 3.2% [2] - The overall consensus estimate for core NII is $142.3 million, suggesting a sequential rise of 4.6% [3] - Other income is estimated at $5.1 million, representing a 27.5% increase from the prior quarter [3] - Servicing revenues are expected to be $16.23 million, indicating a 9.8% fall from the previous quarter [3] - Total revenues are projected at $150 million, marking a significant decline of 46.42% from the year-ago figure [5] Earnings Outlook - The Zacks Consensus Estimate for third-quarter earnings is 23 cents per share, revised downward by 14.8% in the past month, indicating a 72.62% decline from the previous year [4] - Navient's Earnings ESP is -6.85%, and it currently holds a Zacks Rank of 3 (Hold), suggesting limited potential for an earnings beat [4] Operational Efficiency - Cost-control measures are anticipated to enhance operating efficiency and reduce expenses, potentially supporting bottom-line growth in the third quarter [3]