Bank of America Strong Earnings Report Not Enough To Stop Share Price Drop

Published on: 15 Oct, 2018

Bank of America (NYSE: BAC) began the day with a strong 3rd quarter earnings report which outperformed analysts’ expectations. The bank reported earnings per share, 43% higher than this time last year, of USD 0.66 (USD 0.04 greater than expected). In addition to reporting revenue of USD 22.8 billion, indicating a 4% growth from last year, as well as beating experts’ projections by 130 million.

A closer look at the Bank of America’s earnings reveals non-interest expenses fell by 2% over the past year. In addition to reporting an increase in total loan by 3%, with a 6% growth in consumer banking loans and deposits by 4%.  The banks also report return on assets and equity of 1.23% and 11% respectively. However, the strong 3rd quarter earnings report has not stopped the downward trend of Bank of America stock. The stock ended today with 1.90% loss, down 0.54 USD from its opening of USD 28.48.  Over the past 30 days, BAC has experienced a 6.01% share price drop.

Bank of America’s strong earnings report is in line with at of JPMorgan Chase (NYSE: JPM), which reported 2.34 per share and Revenue of USD 27.8 billion. Outperforming expectations of USD 27.5 billion. Citigroup (NYSE: C), which reported 3% growth in loans and a 4% rise in deposits; in addition to loans totaling USD 675 billion and deposits of USD 1.005 trillion. Lastly, Wells Fargo (NYSE: WFC) reported 3rd quarter revenue of USD 21.9 billion, outperforming predictions of USD21.8 billion. However, the bank’s earnings per share of USD 1.13, fell short of expectations earnings of USD 1.19 per share. Unlike Bank of America, Wells Fargo all closed today's trading day with share gains of 2.17%, closing the day at USD 53.24. However, Citigroup and JP Morgan ended the day with losses of 0.90% and 0.57% respectively.

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Disun Holloway

Email: Disun@financialinsiders.com

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