Bank of America Corporation (NYSE: BAC) reported first quarter 2016 earnings this morning. Highlights of the bank’s financial results included EPS of $0.21, in line with the Wall Street analyst estimate consensus of $0.21 and revenues of $19.7 billion, missing the street consensus of $20.30 billion by $600 million or 2.96 percent. CEO Brian Moynihan, who has a net worth estimated to be more than $15 million, and the management team will host a conference call at 8:30 a.m. ET. Investors can listen-in at the Bank of America login for the call.
Bank of America’s reported EPS equates to year over year growth of -22.20 percent. The company’s revenue figure is down 8.03 percent, year over year.
“This quarter, we benefited from good consumer and commercial banking activity,” CEO Moynihan was quoted in bank’s release. “Our business segments earned $4.5 billion, up 16 percent from the year-ago quarter. This was partially offset by valuation adjustments from lower long-term interest rates and annual compensation expenses.”
Yesterday, Charlotte Business Journal reported on Bank of America’s “living will,” its plans for resolution in case of bankruptcy without “wreaking financial havoc,” being panned by the Federal Reserve Board and the Federal Deposit Insurance Corporation. The bank has been given until October 1 to come up with a better plan.
Going into this morning’s earnings report, the street consensus for first quarter BAC EPS of $0.21 had been reduced from $0.32, or by 34.38 percent, over the past 90 days. Full-year 2016 views have been reduced by 12.90 percent, from $1.55 to $1.35, and full-year 2017 estimates have been trimmed by 6.94 percent, from $1.73 to $1.61. Further revisions to analyst estimates are likely with today’s results.
For the second quarter of 2016, analysts see Bank of America EPS shrinking by 15.60 percent; for the full year, the view is for EPS to fall by 2.20 percent. Analysts see BAC EPS rebounding and growing by 19.30 percent in 2017 and by 6.51 percent annually over the coming five years.
Bank of America has dozens of outstanding debt issues, with maturities stretching as far into the future as 2043, as reported by Morningstar.
Currently, the analyst consensus is for Bank of America to generate $84.61 billion in revenue in 2016 and $88.98 billion in 2017, representing 0.40 and 5.20 percent annual growth respectively.
BAC stock is down by 11.83 percent over the past 12 months, compared with a loss of 1.13 percent for the Dow Jones Industrial Average (^DJI). Over the past 10 years, BAC shares have lost 71.51 percent of their value, compared with gain of 60.35 percent for the Dow.
Bank of America pays annual dividends of $0.20, currently yielding 1.55 percent.
Currently, 29 research firms publish price targets on BAC stock. Estimates range from $15 to $20 and average $17.40. The mean recommendation among firms is a 1.8, where 1.0 is a strong buy and 5.0 is a sell.
Bank of America operates approximately 4,700 branches, 16,000 ATMs, online and mobile login options, and call centers. The bank employs 213,000 full-time employees and is headquartered in Charlotte, North Carolina. Backing up CEO Brian Moynihan is CFO Paul Donofio and COO Thomas Montag, who received salaries of $4.63 million and $6.82 million, respectively, in 2015, as reported by Yahoo Finance.
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