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BofA (BAC) Beats on Q4 Earnings; Revenues Up Y/Y

Have you been eager to see how Bank of America CorporationBAC performed in Q4 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 28 cents per share, surpassing the Zacks Consensus Estimate by a penny. Further, the figure was up from 25 cents recorded in the prior-year quarter.

Lower expenses and improved top line were the key reasons 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 3.6% to 27 cents over the last 7 days.

However, BofA has a decent earnings surprise history. Before posting the earnings beat in Q4, the company delivered positive surprises in three quarters of the prior four quarters. Overall, the company has a positive earnings surprise of 7.54% in the trailing four quarters.

Lower-than-expected Revenues

BofA posted net revenues (FTE basis) of $19.5 billion, which lagged the Zacks Consensus Estimate of $20.3 billion. However, it compared favorably with the year-ago number of $18.7 billion.

Key Statistics of Q4

  • Non-interest expense (excluding legal expense) fell 3% to $13.4 billion
  • Investment Banking Fees were $1.3 billion, down 17%.
  • Fixed Income, Currencies and Commodities sales and trading revenue grew 20%
  • Originated $17 billion in residential mortgage loans and home equity loans.
  • Returned $1.3 billion to shareholders through repurchases and dividends.

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #4 (Sell) 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 nearly 1.6% in the pre-trading 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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

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