Bank of America smashes forecasts to double profits in 1st-quarter earnings as the US rebound boosts Wall Street
Ramin Talaie/Corbis via Getty Images
- Bank of America's Q1 earnings blew past analysts' forecasts, with profit more than doubling.
- The bank's traders reaped rewards from volatile markets in the first quarter.
- BofA's results followed stellar earnings from Goldman Sachs and JPMorgan.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Bank of America's first-quarter earnings smashed analysts' estimates on Thursday, with profits more than doubling year on year to $8.1 billion as the bank released reserves set aside to cover coronavirus loan losses.
BofA's $8.1 billion of net income was far higher than analysts' forecasts of $6.25 billion and was up from $4 billion a year earlier, when the pandemic weighed on banks. It pushed earnings per share to $0.86, well above the consensus estimate of $0.66.
Like its peers Goldman Sachs and JPMorgan, Bank of America benefited from a boom in trading revenue during a period of stock market volatility. Revenue from sales and trading jumped 17% to $5.1 billion, the bank said.
Here are the key numbers:
- Net income: $8.1 billion, versus Bloomberg consensus estimate of $6.25 billion
- Earnings per share: $0.86, versus consensus estimate of $0.66
- Revenue: $22.8 billion, versus consensus estimate of $21.97 billion
Both Goldman and JPMorgan also smashed Wall Street estimates on Wednesday. Wells Fargo similarly beat predictions as a turnaround effort showed early results.
"The US earnings season kicked off… with the largest US banks proving once again they can top analysts' expectations by wide margins," said Hussein Sayed, chief market strategist at trading platform FXTM.
"Growth in investment banking, capital markets and paring back loan loss reserves were major factors contributing to the bottom lines of JP Morgan, Goldman Sachs and Wells Fargo."
Bank of America shares were up 1.25% in pre-market trading to $40.38 after the first-quarter earnings were released.
Source: Read Full Article