Navient Q2 Earnings Miss Estimates, Seeks To Maximize Cash Flows From Loan Portfolios

Navient Corporation NAVI reported Q2 adjusted revenues of $221 million, missing the consensus of $223.17 million. The company reported adjusted earnings of $0.70, missing the street view of $0.74.

Net interest income plunged 27.4% Y/Y to $106 million, primarily due to the loan portfolio's paydown and a reduced Floor Income earned.

Provision for loan losses increased by $5 million in the current period due to the extension of the portfolio and the resulting increase in expected future defaults.

The company's GAAP equity-to-asset ratio was 4.5% in the quarter under review, and its adjusted tangible equity ratio of 8.4%.

NAVI exited the quarter with cash and cash equivalents worth $3.3 billion.

"We remain focused on our efforts to maximize cash flows from our loan portfolios, enhance the value of our growth businesses, maintain a strong balance sheet, distribute excess capital, and continuously simplify the business and increase efficiency. Our strong second-quarter results reflect this solid foundation of assets, capabilities and people," said David Yowan, president and CEO of Navient. 

Price Action: NAVI shares are trading lower by 1.65% to $19.02 on the last check Wednesday.