Have you been eager to see how Bank of America Corporation BAC performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this Charlotte-based one of the world's largest financial institutions’ earnings release this morning:
An Earnings Beat
BofA came out with earnings of 36 cents per share, which beat the Zacks Consensus Estimate of 34 cents. However, the figure was down from 43 cents recorded in the prior-year quarter.
Lower costs were the key reason for the earnings beat.
How Was the Estimate Revision Trend?
You should note that the earnings estimate revisions for BofA depicted a bearish stance prior to the earnings release. The Zacks Consensus Estimate fell 8.1% over the last 30 days.
However, BofA has a decent earnings surprise history. Before posting the earnings beat in Q2, the company delivered positive surprises in three quarters of the prior four quarters.
BANK OF AMER CP Price and EPS Surprise
BANK OF AMER CP Price and EPS Surprise | BANK OF AMER CP Quote
Overall, the company has a positive earnings surprise of 8.24% in the trailing four quarters.
Lower-than-expected Revenues
BofA posted net revenues (FTE basis) of $20.4 billion, which was marginally below the Zacks Consensus Estimate of $20.5 billion. Also, it compared unfavorably with the year-ago number of $22 billion.
Key Statistics
Investment banking fees were $1.4 billion, down 8%.
Sales and trading revenue (excluding net DVA) up 12%
Provision for credit losses surged 25% to $976 million
Non-interest expense fell 3% to $13.5 billion
Returned $1.9 billion to shareholders through repurchases and dividends.
What Zacks Rank Says
The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for BofA. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.
How the Market Reacted So Far
Following the earnings release, BofA shares were up more than 1% in the pre-trading session. This is in line with what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have considered the results in their favor. However, the full-session’s price movement may indicate a different picture.
Check back later for our full write up on this BofA earnings report!
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