One-Time Adjustment Propels Bank of America to Q3 Profit (BAC)

Share |

Embattled banking giant Bank of America Corp ( BAC ) on Tuesday said it swung to a third quarter profit, driven by a huge one-time gain tied to revaluation of its own debt.

The Charlotte, NC-based company reported third quarter net income of $5.89 billion, or 56 cents per share, compared with a net loss of $7.65 billion or -77 cents per share, in the year-ago period.

The company's latest results were littered with one-time adjustments and gains, and thus were not comparable with Wall Street analysts' average estimate for a 20 cent per-share profit.

BAC noted the following one-time items in its report:

  • A $4.5 billion gain for positive fair value adjustments on structured debt,
  • A $3.6 billion pretax gain from the recent sale of its stake in China Construction Bank,
  • A $1.7 billion pretax gain in trading Debit Valuation Adjustments ( DVA ), and
  • A $2.2 billion pretax loss of stemming from private equity and strategic investments.

Total revenues, net of interest expenses, rose 6.5% from last year to $28.45 billion, while analysts had expected $25.95 billion in revenue for the quarter.

Bank of America shares rose 12 cents, or +2%, in premarket trading Tuesday.

The Bottom Line
Shares of Bank Of America ( BAC ) have a .66% dividend yield, based on last night's closing stock price of $6.03. The stock has technical support in the $5 price area. If the shares can firm up, we see overhead resistance around the $8 price level.

Bank of America Corp ( BAC ) is not recommended at this time, holding a DARS™ Rating of 2.6 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Created by

This article appears in: Investing , Stocks

Referenced Stocks: BAC , DVA

More from

Related Videos



Most Active by Volume

  • $15.85 ▲ 2.06%
  • $112.34 ▲ 4.29%
  • $57.29 ▲ 0.28%
  • $24.57 ▲ 2.89%
  • $9.32 ▲ 1.08%
  • $103.90 ▲ 2.82%
  • $105.44 ▼ 0.33%
  • $43.36 ▲ 3.68%
As of 9/2/2015, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by