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Bank of America (BAC) reported mixed results in the second quarter with Citigroup (C) and Wells fargo (WFC) also due Wednesday. Bank stocks fell.
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Results come after JPMorgan Chase (JPM) and Goldman Sachs (GS) beat second quarter guidance, but reported a sharp slowdown in trading revenue.
Bank of America profits
Estimates: Zacks Investment Research analysts saw Bank of America earnings per share soar 111% to 78 cents and sales drop 2.5% to $ 21.77 billion.
Results: Bank of America profits were $ 1.03 per share. The allowance for bad debts decreased by $ 6.7 billion. Revenue fell 4% to $ 21.5 billion. Concerns were also expressed about second quarter spending.
Personal banking revenues increased 4% to $ 8.2 billion. Wealth and investment management revenues increased 14% to $ 5.1 billion. Global banking revenues were flat at $ 5.1 billion. Income from fixed income trading fell 38% to $ 2 billion, while equity trading jumped 33% to $ 1.6 billion. Investment banking fees fell 1.7% to $ 2.1 billion.
Store: Shares fell 2% to 39.01 in the stock market today. BAC stock has a buy point of 43.59, according to MarketSmith chart analysis. But it’s near the bottom of its flat base. Its line of relative strength is declining. Bank of America’s RS Rating is 77 out of 99 possible. His EPS rating is 78.
Benefits of Citigroup
Estimates: Citigroup’s earnings per share are estimated to balloon 298% to $ 1.99, but revenue is expected to fall 11% to $ 17.54 billion.
Results: Check back later Wednesday.
Store: Stocks lost 0.7%. Citigroup stock broke a 76.23 buy point from a flat base in early June, but has since reversed. Shares are down 15% from their 52-week high of 80.29, notched intraday on June 3. Citi’s line of relative strength is sloping downward. Its RS rating is 56, while its EPS rating is 75.
Wells Fargo Gains
Estimates: Wells Fargo profits are expected to rise 247% to 97 cents per share, and sales are expected to decline 0.5% to $ 17.74 billion.
Results: Come back Wednesday.
Store: Equities edged down 0.3%. WFC stock is approaching a buy point of 48.23 from a flat base. Its relative line of force tends to decline. Wells Fargo’s RS rating is 83 and its EPS rating is 50.
JPMorgan and Goldman Sachs exceed estimates
JPMorgan profits soared to $ 3.78 per share, while revenues hit $ 30.5 billion, both beating opinions. The banking giant released $ 3 billion in loan loss reserves, increasing the bottom line.
Meanwhile, Goldman Sachs EPS surged to $ 15.02 as revenue hit $ 15.39 billion, both above estimates. Goldman released $ 92 million in credit reserves.
The sustained pace of IPOs and mergers and acquisitions fueled the gains of the investment bank. The latest Federal Reserve stress test results also allowed banks to increase dividends and buybacks.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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