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AWS 1/13: Q4 Earnings Season: The Big Banks - JPM, BAC, WFC
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Friday, January 13, 2017
So it’s Friday the 13th on the first big day of Q4 earnings season. But from our perspective, there really isn’t anything too ominous to expect for market participants. Airline major Delta (DAL - Free Report) kicked things off yesterday with an earnings meet and a revenue beat; let’s see how some of the big banks — #2 overall on the Zacks Industry Rank currently, by the way — fared before the bell today:
JPMorgan (JPM - Free Report) earned its vaunted status as one of the premium global U.S.-based banks by beating estimates on both top and bottom lines. $1.71 per share topped the $1.42 in the Zacks consensus estimate. The Zacks Rank #2 (Buy) stock (with a Zacks Value/Growth/Momentum Style Score of ‘F’) also beat estimates on the top line: $24.33 billion vs. $23.24 billion expected.
Bank of America (BAC - Free Report) put out a mixed Q4 earnings report before the bell, beating by 2 cents in profits to 40 cents per share, while missing on the revenue side: $19.99 billion vs. $20.62 billion expected. This is a Zacks Rank #1 (Strong Buy) stock with another poor Zacks Style Score of ‘D.’
Wells Fargo (WFC - Free Report) managed to miss on both top and bottom lines: 96 cents per share on revenues of $21.582 billion, compared with the expected $1.00 and $22.42 billion, respectively. Another Zacks Rank #2 stock, Wells Fargo carries a Zacks Style Score of ‘C.’ However, the companies well-covered cross-selling scandal is not yet showing up in the company’s bottom line; consumer loan growth is shown to have declined in Q4, and it’s possible we’ll see some tarnish on this stock for the next few quarters because of this.
New Econ Data: PPI & Retail Sales
Also ahead of today’s open, the Producer Price Index (PPI) and Retail Sales numbers were released, giving even more grist for the mill to market analysts. PPI results were mostly in-line: +0.3% in December, down a tick from the unrevised +0.4%, and +0.2% subtracting food & energy. This is higher than the +0.1% minus food & energy expected.
Retail Sales for holiday season rose 0.6%, which was a little under expectations. November’s 0.1% was revised up to 0.2%, which is the exact figure of the control and ex-auto figures. However, these are both below expectations of 0.4% and 0.5%, respectively.
A big jump in auto sales for December shows the heavy advertising during holiday season has paid off. Considering that Internet sales — widely considered to be taking a big bite out of diminishing department store sales (which were -0.6% last month) — were up a mere 1.3%, auto sales at +2.4% was the big performer over the holidays.
Image: Bigstock
AWS 1/13: Q4 Earnings Season: The Big Banks - JPM, BAC, WFC
Friday, January 13, 2017
So it’s Friday the 13th on the first big day of Q4 earnings season. But from our perspective, there really isn’t anything too ominous to expect for market participants. Airline major Delta (DAL - Free Report) kicked things off yesterday with an earnings meet and a revenue beat; let’s see how some of the big banks — #2 overall on the Zacks Industry Rank currently, by the way — fared before the bell today:
JPMorgan (JPM - Free Report) earned its vaunted status as one of the premium global U.S.-based banks by beating estimates on both top and bottom lines. $1.71 per share topped the $1.42 in the Zacks consensus estimate. The Zacks Rank #2 (Buy) stock (with a Zacks Value/Growth/Momentum Style Score of ‘F’) also beat estimates on the top line: $24.33 billion vs. $23.24 billion expected.
Bank of America (BAC - Free Report) put out a mixed Q4 earnings report before the bell, beating by 2 cents in profits to 40 cents per share, while missing on the revenue side: $19.99 billion vs. $20.62 billion expected. This is a Zacks Rank #1 (Strong Buy) stock with another poor Zacks Style Score of ‘D.’
Wells Fargo (WFC - Free Report) managed to miss on both top and bottom lines: 96 cents per share on revenues of $21.582 billion, compared with the expected $1.00 and $22.42 billion, respectively. Another Zacks Rank #2 stock, Wells Fargo carries a Zacks Style Score of ‘C.’ However, the companies well-covered cross-selling scandal is not yet showing up in the company’s bottom line; consumer loan growth is shown to have declined in Q4, and it’s possible we’ll see some tarnish on this stock for the next few quarters because of this.
New Econ Data: PPI & Retail Sales
Also ahead of today’s open, the Producer Price Index (PPI) and Retail Sales numbers were released, giving even more grist for the mill to market analysts. PPI results were mostly in-line: +0.3% in December, down a tick from the unrevised +0.4%, and +0.2% subtracting food & energy. This is higher than the +0.1% minus food & energy expected.
Retail Sales for holiday season rose 0.6%, which was a little under expectations. November’s 0.1% was revised up to 0.2%, which is the exact figure of the control and ex-auto figures. However, these are both below expectations of 0.4% and 0.5%, respectively.
A big jump in auto sales for December shows the heavy advertising during holiday season has paid off. Considering that Internet sales — widely considered to be taking a big bite out of diminishing department store sales (which were -0.6% last month) — were up a mere 1.3%, auto sales at +2.4% was the big performer over the holidays.
Mark Vickery
Senior Editor
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