Bank of America Corp. (BAC, Financial) reported its financial results for the third quarter before the opening bell on Oct. 13.
The North Carolina-based bank posted earnings per share of 48 cents, beating estimates of 45 cents. Adjusted quarterly revenue of $22.08 billion beat expectations of $21.98 billion and increased from $21.86 billion in the prior-year quarter.
Despite the beat, shares fell 0.8% in premarket trading following the announcement before reversing higher.
The trend in the company’s revenue growth over the past decade is illustrated in the graph below.
The company reported a 22% year-over-year decline in fixed-income trading revenue to $2.15 billion, which was attributed to unfavorable market conditions in regard to credit-related products and lower volatility in rates products.
Citigroup Inc. (C, Financial) and JPMorgan Chase & Co. (JPM, Financial) also reported declines in this metric on Thursday.
CEO Brian Moynihan commented on the company’s performance.
"Our focus on responsible growth and improving the way we serve customers and clients produced another quarter of strong results,” he said. “Revenue across our four lines of business grew 4%, even with a challenging comparable quarter for trading.”
The consumer banking segment’s revenue grew 10% to $8.8 billion. The segment’s loans rose 8% and deposits swelled 9%.
In addition, the bank’s net interest income, a key metric, was $11.4 billion, which was higher than expectations of $11.33 billion and increased from $10.43 billion the year before.
Net charge-offs, which measures costs for bad debt, increased $12 billion year over year to $900 million as a result of higher commercial losses.
Total loans for the quarter came in at $927.1 million, higher than the expected $919.94 million. Deposits for the quarter were $1.28 trillion, again exceeding estimates of $1.27 trillion.
Bank of America’s largest shareholder is Warren Buffett (Trades, Portfolio) with 700 million shares, or 6.63% of the company. A total of 47 gurus have positions in the stock.
According to GuruFocus data, the stock has gained 15% year to date, outperforming the Standard & Poor's 500 by a narrow margin.
Disclosure: I do not own any stocks mentioned.
