Investors wait Bank of America Corp (NYSE:BAC) to report on October, 14 before the open. its quarterly earningsWall Street analysts expect $0.33 earnings per share, up $0.34 or 3,400.00% from last year’s $-0.01 same quarter earnings.
Advertisement
Bank of America, the consumer banking giant, said it swung to a profit in the third quarter on Wednesday, helped by lower borrowing costs and legal expenses.
Johnson & Johnson (NYSE:JNJ) reported sales of $17.1 billion for the third quarter of 2015, a decrease of 7.4% as compared to the third quarter of 2014.
BofA, which has paid more than US$70 billion in legal expenses since 2008, said its legal costs fell for the third straight quarter, dropping to US$231 million from US$6 billion a year earlier.
Total revenue at BofA dropped by 2.4% to just over $20.9 billion on its fully taxable basis in the quarter that ended on September 30, but exceeded the estimate of analysts of $20.76 billion. Equities research analysts predict that Bank of America will post $1.41 earnings per share for the current fiscal year.
In other Bank of America news, insider Thong M. Nguyen sold 7,520 shares of the stock in a transaction dated Tuesday, July 21st. The charts below show this BAC effect in the results thus far – the left-hand chart includes BAC, the right-hand chart excludes it. As you can see, the exclusion of Bank of America totally deflates the earnings growth rate. Oppenheimer reaffirmed an “outperform” rating on shares of Bank of America in a report on Saturday, September 5th.
These positive developments aside, Bank of America’s performance in the third quarter underscored that its biggest challenge right now is to grow revenue.
BofA shares rose 2.4 percent in premarket trading.
Noninterest expense declined 31 percent to $13.8 billion. Through nonbank subsidiaries that are various and its banking, it provides a variety of banking and nonbank financial services and products. Bank of America offering guidance above these figures could potentially cause BAC shares to rally. On Tuesday, JPMorgan said it made profit of $6.8 billion in the quarter, up 22 percent from a year ago. Bank of America, on the other hand, still appears to be in the recovery mode following the recession and its resulting years of litigation and non-performing assets that resulted. Bank of America now has an average rating of “Buy” and an average price target of $18.79. During the same quarter past year, the firm earned ($0.04) earnings per share.
“Banks had to deal with a tough operating environment over the summer, with modest gains in the core loan portfolios offsetting the mixed capital market business, soft advisory activity levels, and the seemingly neverending low interest backdrop”, said Sheraz Mian, research director of Zacks, in a recent quarterly earnings outlook.
Advertisement
Global Wealth and Investment Management net income came in at $656 million, compared to $812 million in 3QFY14.
