AG Edwards is keeping its hold on financial services company Provident Financial (PFGI ). Analyst Timothy Willi says the company's $0.97 a share after-tax charge is a result of higher credit costs. The main contributor relates to continued deterioration of airline-related portfolio as result of the September 11 events.
Willi notes that the total amount of charge-offs consist of the following: $30 million related to airline industry, $30 million to increase reserves, $15 million in higher commercial charge-offs. The company expects to post a $0.57 a share fourth quarter loss and earnings per share in 2001 of $0.46. Willi believes asset quality concerns will continue to weigh on NT EPS outlook and stock price. He elects to stay on sidelines until credit quality outlook becomes clearer.