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Jun 30, 2020
Nelnet Q2 2020 Earnings Report
Nelnet reported strong second quarter results driven by its loan portfolio and core operating businesses, along with a gain on Hudl investment.
Key Takeaways
Nelnet reported GAAP net income of $86.5 million, or $2.21 per share, for the second quarter of 2020, compared to $24.6 million, or $0.61 per share, for the same period a year ago. The increase was primarily due to a $51.0 million gain from adjusting the carrying value of its investment in Hudl. Excluding derivative market value adjustments, net income was $89.5 million, or $2.28 per share.
GAAP net income was $2.21 per share, or $2.28 per share excluding adjustments.
The company repurchased 1.5 million shares for $67.3 million.
A $51 million gain was recognized on the Hudl investment.
The company was servicing $476.5 billion in loans as of June 30, 2020.
Revenue by Segment
Forward Guidance
Nelnet intends to use its strong liquidity position to invest in market opportunities
Positive Outlook
- federally insured, private education, and consumer loan acquisitions
- strategic acquisitions and investments, including anticipated capital commitments to Nelnet Bank
- expansion of ALLO's communications network
- capital management initiatives, including stock repurchases
- debt repurchases, and dividend distributions.
Challenges Ahead
- risks and uncertainties related to the severity, magnitude, and duration of the COVID-19 pandemic
- risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and any future servicing contracts with the Department
- risks to the company related to the Department's initiatives to procure new contracts for federal student loan servicing and awards of contracts to other parties
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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