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BofA (BAC) Beats on Q3 Earnings & Revenue Estimates, Costs Up

Zacks Equity Research

Have you been eager to see how Bank of America BAC performed in Q3 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 adjusted earnings of 75 cents per share, which surpassed the Zacks Consensus Estimate of 50 cents.

Higher revenues support the company’s results.

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 has moved 26.5% lower over the last 30 days.

Nonetheless, BofA has an impressive earnings surprise history. Before posting the earnings beat in Q3, the company delivered positive surprises in all four trailing quarters.

Bank of America Corporation Price and EPS Surprise

Overall, the company has a positive earnings surprise of 7.7% in the trailing four quarters.

Better-than-Expected Revenues

BofA posted net revenues of $22.8 billion, which surpassed the Zacks Consensus Estimate of $22.2 billion.

Key Q3 Statistics

  • Results exclude merchant services joint venture impairment charges of $2.1 million. Including this charge, earnings stood at 56 cents per share

  • Investment banking fees were $1.5 billion, up 27% year over year

  • Sales and trading revenue (excluding net DVA) increased 4% from the year-ago quarter to $3.2 billion

  • Provision for credit losses rose 9% from the prior-year quarter to $779 million

  • Adjusted non-interest expense up nearly 1% year over year to $13.1 billion


What Zacks Rank Says

At present, BofA carries a Zacks Rank #3 (Hold). 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.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far

Following the earnings release, BofA shares were up nearly 2.4% in the pre-trading session. This is in line with what the stock witnessed in the prior-day’s 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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