BAC in Black.
Bank of America swung to a profit in the third quarter, as accounting gains and asset sales helped offset rising costs and declining lending profit. Earnings came in at $0.56 per share after the bank posted a loss of $0.77 a year earlier, ahead of the consensus estimate of $0.28 per share. Net interest income fell to $10.7 billion from $12.7 billion while net interest margin shrank to 2.32% from 2.72%.
The company’s mortgage unit lost $1.1 billion in the quarter, nearly tripling a loss of $392 million a year ago, largely driven by $500 million in litigation expenses. Investment banking was also weak as the company’s global bank and markets unit lost $302 million after posting a profit of $1.47 billion a year earlier.
While the earnings beat sent shares higher, reaction amongst analysts was mixed. One fund manager called the results “very good…surprisingly good in a very tough quarter.” Another commented, “The headline numbers are dramatically different than reality. I think it would have been flat at best without the adjustments,” while a credit rating agency said, “Core earnings appear very suspect.”
Bank of America (BAC : NYSE : US$6.64), Net Change: 0.61, % Change: 10.12%, Volume: 491,684,920
Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.
For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx