Meredith Whitney, Are you there?

Despite relatively strong second-quarter earnings, US banks are still suffering from poor revenue growth and will continue to do so at least into next year, financial analyst Meredith Whitney told CNBC Tuesday.

CNBC Meredith Whitney on Closing Bell

"It was a quarter of real revenue shortfalls, real revenue weakness, and I think that is a persistent theme that we’re going to see throughout the next several quarters," said Whitney, a former Oppenheimer analyst who now runs her own firm, Meredith Whitney Advisory Group.

Deal volume in the debt and equity markets is down 40 percent, Whitney said.

"Wall Street didn’t make a lot of head count changes and I think what you’re’ seeing now is the revenues don’t support the expense structure."

As a result, banks will have to rely on further cost-cutting and layoffs to maintain earnings, she said.

Whitney told CNBC in May that investors should "avoid financials at all costs," primarily because of the financial reform bill. But she said Tuesday that a bigger worry now is the revenue shortfalls caused by the still weak housing market and by a lack of deals on Wall Street. For that reason, she still expects financial stocks to do poorly.

In Europe, stress tests designed to measure the strength of bank balance sheets "were arguably negotiated," and didn't address the fact European banks are sitting on a lot of overvalued sovereign debt, Whitney said.

"The stress tests did a lot to tell you the obvious, a lot was not taken under consideration," Whitney said.

For investors, Whitney recommends looking at financials in emerging markets such as South America.

"There are parts of South America, parts of the world, that are really growing and are new fresh markets," Whitney adding, adding that "they carry a lot of risk."