Bank of America Beats on Profit, But Short on Rev Estimates


Bank of America  on Tuesday reported quarterly profit that beat analysts’ estimates, but revenue fell short of expectations. The second biggest U.S. bank by assets also announced it expects fiscal 2019 net interest income (NII) to grow at “roughly half the pace of fiscal 2018.”

Shares of BofA declined 1.34% in premarket trading immediately after the earnings report. At 9:40 a.m. ET, the stock was down 1.98% to $29.25. The stock is up more than 20% since the beginning of the year.

BAC Earnings

BofA posted first quarter earnings of $7.3 billion, or $0.70 per share, up 6% from $6.9 billion, or $0.62 per share, in the same period last year. On average, analysts polled by Refinitiv expected the company to report adjusted earnings of $0.66 per share in Q1 2019.

Total revenue, the company said, was $23.0 billion compared with $23.1 billion in the year-ago period. Analysts were expecting revenue of $23.3 billion, according to Refinitiv.

Net interest was pegged at $629 million, up 10% on a year-over-year basis. BofA attributed the jump in net interest to growth in loans and deposits, as well as higher interest rates. Trading revenue came to $3.5 billion, a slump of 17% from the first quarter of calendar 2018.

Equity trading revenues dropped 22% to $1.2 billion while Fixed Income, Currencies and Commodities (FICC) trading revenue declined 8% to $2.4 billion. The bank’s wealth management business profit grew 14% to $1 billion, while global banking saw profit rise 2% to $2 billion.

Bank of America CEO Comments

“Our diverse business mix and commitment to responsible growth drove record quarterly earnings. Economic growth and consumer activity in the U.S. continue to be solid, businesses of every size are borrowing and driving the economy, and asset quality is strong. It was a challenging capital markets environment but our team and platform are optimized to serve clients and generate stable revenues across a range of market conditions over time,” commented Brian Moynihan, chief executive officer of the bank.

Bank of America Corp. Profile

Bank of America is one of the largest financial institutions in the United States, with more than $2.3 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets.

Bank of America’s consumer-facing lines of business include its network of branches and deposit-gathering operations, home mortgage lending, vehicle lending, credit and debit cards, and small-business services.

The company’s Merrill Lynch operations provide brokerage and wealth management services, as does U.S. Trust private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending, and capital markets operations. Bank of America has operations in several countries.