* Q2 loss/shr $0.29 vs $ $0.74 yr-back
* Deemed div on preferred hurts Q2
* Analysts laud credit quality
* Stock see-saws on Nasdaq
(Adds details, analysts' comments; updates stock activity)
By Anurag Kotoky
BANGALORE, July 23 Popular Inc (BPOP.O) posted
its eighth straight quarterly loss, trailing Wall Street's
estimates, as it took a big hit from deemed dividends on
preferred stock, but analysts lauded the improvement in credit
Shares of the largest Puerto Rican bank see-sawed on
Nasdaq, falling 4 percent in early trade, and recovering to
trade up 4 percent.
"I was encouraged by the direction of credit quality. There
was very little growth in non-performing assets in the second
quarter and net loan charge-offs declined noticeably from the
first quarter," B. Riley & Co analyst Joe Gladue said.
Popular said provision for loan losses totaled $202.3
million, equivalent to net charge-offs for the second quarter,
compared with $349.4 million a year back.
"Provision matching net charge-offs is a very good sign
because it is an indication that the company feels it may have
enough reserves stashed away to weather the storm," Raymond
James analyst Amanda Larsen told Reuters.
She attributed the early stock fall to the headline EPS
number, which came below analysts estimates.
"However, EPS is not as important and included a large
noise item... The real, underlying, important story here is
credit quality and the outlook for revenue from the FDIC deal,"
Larsen said by phone.
For the second quarter, the company lost $247.5 million, or
29 cents a share, compared with a loss of $207.8 million, or 74
cents a share, a year ago.
The company has 853 million shares outstanding, compared
with 281.9 million shares a year ago. It converted some
preferred shares to 383 million common shares during the second
Analysts were looking for a loss of 6 cents a share,
excluding items, according to Thomson Reuters I/B/E/S.
Popular, which has operations in Puerto Rico, the United
States, the Caribbean and Latin America, said in a regulatory
filing that it remains cautious for the rest of 2010 and 2011
due to economic environment in Puerto Rico and a possible
slowdown in the United States.
The island of Puerto Rico, a manufacturing hub for
petrochemical, pharmaceutical and technology companies, as well
as a tourism destination, faced the financial meltdown much
before the rest of the world went into recession.
Shares of the parent of Banco Popular were up 4 percent at
$2.75. They have gained significantly since hitting a 52-week
low of $1 exactly a year back.
(Reporting by Anurag Kotoky in Bangalore; Editing by Don