UK Markets close in 2 hrs 52 mins

BofA (BAC) Beats on Q4 Earnings & Revenue Estimates, Costs Up

Zacks Equity Research

Have you been eager to see how Bank of America BAC 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 74 cents per share, which surpassed the Zacks Consensus Estimate of 68 cents.   

Slight rise in non-interest income 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 1.4% lower over the past 30 days.

Nonetheless, BofA has an impressive earnings surprise history. Before posting the earnings beat in Q4, 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 9.1% in the trailing four quarters.

Better-than-Expected Revenues

BofA posted net revenues of $22.3 billion, which surpassed the Zacks Consensus Estimate of $22 billion.

Key Q4 Statistics

  • Net income was $7 billion, down 4%

  • Investment banking fees were $1.5 billion, up 9% year over year

  • Sales and trading revenue (excluding net DVA) increased 13% from the year-ago quarter to $2.9 billion

  • Provision for credit losses rose 4% from the prior-year quarter to $941 million

  • Non-interest expense up 1% year over year to $13.2 billion

What Zacks Rank Says

At present, BofA carries a Zacks Rank #2 (Buy). 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 1% 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!

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.

This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.

See their latest picks free >>

Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research