Back to top

Image: Bigstock

BofA (BAC) Beats on Q1 Earnings and Revenue Estimates

Read MoreHide Full Article

Have you been eager to see how Bank of America Corporation (BAC - Free Report) performed in Q1 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 41 cents per share, which surpassed the Zacks Consensus Estimate of 35 cents. Also, the figure was up from 28 cents recorded in the prior-year quarter.

Increase in revenues was the key reason for the earnings beat.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for BofA depicted a neutral stance prior to the earnings release. The Zacks Consensus Estimate has remained stable over the last 7 days.

Further, BofA has a decent earnings surprise history. Before posting the earnings beat in Q1, the company delivered positive surprises in three quarters of the prior four quarters.

Overall, the company has a positive earnings surprise of 6.8% in the trailing four quarters.

Higher-than-expected Revenues

BofA posted net revenues (FTE basis) of $22.4 billion, which was above the Zacks Consensus Estimate of $21.5 billion. Moreover, it compared favorably with the year-ago number of $21 billion.

Key Statistics

 

  • Investment banking fees were $1.6 billion, surging 37%
  • Sales and trading revenue (excluding net DVA) up 23%
  • Provision for credit losses fell 16% to $835 million
  • Non-interest expense relatively stable at $14.8 billion
  • Operating leverage of 7%


What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #2 (Buy) for BofA. 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 1.3% 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!

Sell These Stocks Now

Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.  

See today's Zacks "Strong Sells" absolutely free >>.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Bank of America Corporation (BAC) - free report >>