Yahoo Finance Bank of America Turns Lower after Q2 Revenue Miss
Investing.com - Bank of America (NYSE:BAC) followed its Wall Street rivals in reporting a second quarter that showed strength in its consumer and business lending, offset by a decline in revenue at its investment bank that reflected the growing impact of trade disputes and slowing growth on financial markets.
The company reported earnings per share of $0.74 on revenue of $23.08 billion. Analysts polled by Investing.com forecast EPS of $0.71 on revenue of $23.12 billion.
The bank's shares turned lower after the release and were off 0.3% to $28.90 by 7:10 AM ET (13:10 GMT) in premarket trade, compared to $29.17 ahead of the publication.
Net interest income rose 3% due to higher interest rates and growth in loan and deposit balances, but that confirmed a slowdown that chief financial officer Paul Donofrio had warned of in April. Net interest income rose 6% in 2018.
Brian Moynihan, chairman and chief executive, said the results were the best quarterly and first-half earnings in the bank’s history and that the outlook points to a “steadily growing economy”.
“We see solid consumer activity across the board, with spending by Bank of America consumers up 5% this quarter over the second quarter of last year,” he said.
These earnings follow the general pattern seen by rivals who reported this week.
JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) beat quarterly profit estimates on Tuesday but reported weaker net interest income, pointing to rising deposit costs. Citigroup (NYSE:C) reported a drop in its net interest margin on Monday. Margins have being squeezed as the spread between short- and long-term interest rates has shrunk, crimping banks' ability to invest customer deposits profitably. All of the major banks have also reported underlying declines in revenue from trading in equities, bonds and currencies.
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