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Sep 30, 2020
Cass Q3 2020 Earnings Report
Cass reported a decrease in earnings per share and net income due to the impact of COVID-19 and lower interest rates.
Key Takeaways
Cass Information Systems reported a decrease in third quarter earnings, with earnings per share at $0.40, a 29% decrease from 2019. Net income also decreased to $5.8 million, compared to $8.2 million in the previous year. The declines were attributed to the impact of COVID-19, lower interest rates, and lower energy prices.
Third quarter revenue decreased by 12% compared to the same period in 2019.
Net income for the quarter was down 29% compared to the prior year.
Transportation volumes are trending towards pre-COVID levels, driven by the manufacturing sector.
New customer wins are setting the stage for earnings recovery as the pandemic's negative impacts subside.
Revenue by Segment
Forward Guidance
Cass expects recovery in earnings once the negative impacts of the pandemic subside, supported by new customer wins and a flexible business model.
Positive Outlook
- Team is navigating the significant challenges.
- Company remains profitable and financially strong.
- Being a flexible and reliable business partner is proving to be a critical benefit to our clients.
- Continuing new customer wins sets the stage for a recovery in our earnings.
- The board’s confidence in the company’s long-term prospects, underpinned by its strong capital base.
Challenges Ahead
- Impact of COVID-19 on Cass customers
- Commitment of the U.S. Federal Reserve to hold interest rates at near-zero levels.
- Lower energy prices
- COVID-related bankruptcies and location closings
Historical Earnings Impact
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Avg. Return Before/After Earnings
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