Banks continue their flurry of earnings reports this week as investors cautiously eye results after the rout in bank stocks in March. Bank of America beat expectations with a major earnings surprise early Tuesday. Goldman Sachs posted mixed results while Bank of New York Mellon was in line with expectations. Morgan Stanley and US Bancorp beat expectations on Wednesday.
JP Morgan (JMP), Wells Fargo (WFC) and Citigroup (C) kicked off earnings last week with major beats for major banks, driven by spikes in net interest income. However, analysts expect lower investment banking revenue to weigh on results.
Bank of America
Results: Bank of America’s earnings jumped 17.5% to 94 cents per share as revenue jumped 13.4% to $26.3 billion.
Expectations: Analysts polled by FactSet expected Bank of America (BAC) earnings will rise 2 cents to 82 cents per share on revenue growth of 8.3% to $25.16 billion.
Average deposits fell to $1.91 trillion from $1.93 trillion at year-end and $2.07 trillion in the first quarter of 2022, respectively.
Net interest income jumped nearly 25% to $14.45 billion. Investment banking revenue slumped 20% to $1.2 billion, but fared slightly better than FactSet’s forecast of $1.02 billion.
Outlook: FactSet analysts expect adjusted earnings to rise about 5% to $3.39 per share for fiscal 2023 on revenue growth of 5.2% to $99.845 billion.
BAC stock edged up 0.6% to 30.55 on Tuesday after gaining 2.1% premarket after the results. Shares have crashed 11.5% in the past three months. Bank of America’s stock is up more than 15% from its March low, but remains down 7.8% this year.
Results: Goldman Sachs earnings fell 18% to $8.79 per share on a 5% drop in revenue to $12.22 billion.
Expectations: Wall Street expected Goldman Sachs (GS) will fall for the fifth consecutive quarter, falling 24% to $8.14 per share, while revenue fell slightly 1.3% to $12.76 billion.
Investment banking revenue fell 26% to $1.58 billion, slightly above the expected drop to $1.2 billion. Net interest income fell 3% during the year to $1.78 billion.
Outlook: Analysts expect Goldman Sachs’ full-year earnings to rise 7% to $32.26 per share on revenue growth of 4.2% to $49.39 billion.
GS stock fell 1.7% on Tuesday after the results. The shares have lost 6% of their price in the past three months and are down 4% so far this year.
Bank of New York Mellon
Results: Bank of New York Mellon earnings jumped 30% to $1.12 per share on 11% revenue growth to $4.36 billion.
Average bank deposits fell to $274 billion, down 3% from the previous quarter and 13% from the first quarter of 2022. Net interest income jumped 62% on the year to reach $1.13 billion.
Expectations: FactSet analysts guided the Bank of New YorkMellon (BK) to report a 30% rise to $1.12 per share as revenue as revenue jumped 12% to $4.4 billion.
Outlook: Bank of New York Mellon earnings are expected to climb 68.6% to $4.89 per share on revenue growth of 8.3% to $17.74 billion.
BK stock rose 1.3% on Tuesday after falling early in the following results. Shares have fallen around 10% in the past three months and have fallen 1.5% in 2023.
Results: Morgan Stanley’s earnings fell 15.8% to $1.70 per share while revenue fell 2% to $14.5 billion.
Expectations: Wall Street forecasts had Morgan Stanley (MS) earnings sagged 19.3% to $1.63 per share while revenue fell 5.6% to $13.97 billion.
Investment banking revenue fell 23.7% on the year to $1.25 billion, slightly above analysts’ estimates of $1.13 billion. Net interest income increased 6% to $2.35 billion. Deposits decreased to $347.52 billion, down 3% from the prior quarter and 4% from a year ago, respectively. Analysts had expected filings to edge up for the second straight quarter.
Outlook: FactSet predicts Morgan Stanley’s earnings will climb 6% in fiscal 2023 to $6.75 per share. Consensus calls for a 4% revenue increase to $55.87 billion.
MS stock slid 2.7% premarket after the results. Shares have fallen 2.6% in the past three months, but are up 5% this year.
Results: US Bancorp’s earnings jumped 17% to $1.16 per share while revenue jumped 28% to $7.175 billion.
Expectations: Wall Street saw American bank (USB) earnings jumped 13% to $1.12 per share. The consensus pushed revenue up 27.5% to $7.14 billion.
Average total deposits increased to $510.32 billion, up 5.9% from year-end and 12.3% from the first quarter of last year. Experts expected average deposits to rise to $515 billion. Net interest income jumped 45% during the year to $4.67 billion.
Outlook: Analysts expect US Bancorp’s fiscal 2023 earnings to rise nearly 29% to $4.75 per share. Revenue is expected to rise 20% to $29.23 billion.
USB stock rose slightly pre-market after the results. Shares have fallen nearly 25% in the past three months and are down 18.4% this year.
You can follow Harrison Miller for more stock info and updates on Twitter. @IBD_Harrison
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