SLM Corp

Sallie Mae's second-quarter results missed Wall Street forecasts, with revenue of $401.1 million falling 1.8% short of the $408.3 million consensus and GAAP earnings per share of $0.29 missing the $0.44 estimate by 34.2%. Management attributed the flat revenue and lower profits to increased noninterest expenses from upfront investments in new products and technology, along with a temporary dip in net interest margin due to elevated liquidity ahead of peak loan origination season. CEO Jonathan Witter noted that credit quality remains strong and that the current loss pressure is concentrated and manageable. During the earnings call, analysts pressed for details on net interest margin recovery, credit performance, loan yields, back-half EPS guidance, and the decision to halt debt sales, with CFO Peter Graham indicating that NIM should return closer to the 5% target as liquidity is deployed into peak season originations.

Sallie Mae reported second-quarter revenue of $332.82 million, an 11.7% decline from a year ago and 6.31% below the Zacks Consensus Estimate of $355.22 million. Earnings per share came in at $0.29, down from $0.32 a year earlier and missing the consensus estimate of $0.46 by nearly 37%. Net interest margin was 4.8%, below the 5.1% analysts had projected, while net interest income of $332.82 million fell short of the $355.48 million estimate. Gains on sales of loans, net, reached $14.94 million, exceeding the $10.57 million estimate, and total non-interest income of $68.29 million topped the $56.98 million consensus. Shares have returned 5.8% over the past month, outperforming the S&P 500's 0.4% gain, and the stock carries a Zacks Rank of 3, or Hold.