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BofA (BAC) Beats on Q3 Earnings and Revenue Estimates

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Have you been eager to see how Bank of America Corporation (BAC - Free Report) 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 earnings of 48 cents per share, which surpassed the Zacks Consensus Estimate of 46 cents.

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 bearish stance prior to the earnings release. The Zacks Consensus Estimate has declined 2.1% 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.

Overall, the company has a positive earnings surprise of 12.5% in the trailing four quarters.

Higher-than-expected Revenues

BofA posted net revenues (FTE basis) of $22.1 billion, which was above the Zacks Consensus Estimate of $22 billion. Moreover, it compared favorably with the year-ago number of $21.9 billion.

Key Statistics
 

  • Investment banking fees were $1.5 billion, up 1%
  • Sales and trading revenue (excluding net DVA) down 15%
  • Provision for credit losses fell 2% to $834 million
  • Non-interest expense down 3% to $13.1 billion


What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) 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 1.1% in the pre-trading session. This is in contrast 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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