Banks continue their flurry of earnings reports this week as investors cautiously eye results following the March rout of banking stocks. Bank of America topped 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 U.S. Bancorp edged out expectations Wednesday.
JPMorgan, Wells Fargo and Citigroup kicked off earnings last week with major beats for the big banks, driven by spikes in net interest income. However, analysts expect drops in investment banking revenue to weigh on results.
Bank Of America
Results: Bank of America earnings leapt 17.5% to 94 cents per share as revenue surged 13.4% to $26.3 billion.
Expectations: Analysts polled by FactSet had expected Bank of America earnings to rise 2 cents to 82 cents per share on 8.3% revenue growth to $25.16 billion.
Average deposits fell to $1.91 trillion, down from $1.93 trillion at the end of the year, and down from $2.07 trillion in Q1 2022, respectively.
Net interest income spiked nearly 25% to $14.45 billion. Investment banking revenue crumbled 20% to $1.2 billion, but fared slightly better than FactSet forecasts of $1.02 billion.
Outlook: FactSet analysts project adjusted earnings will rise roughly 5% to $3.39 per share for fiscal 2023 on 5.2% revenue growth to $99.845 billion.
BAC stock slumped 1.6% Wednesday after edging up 0.6% Tuesday following results. Shares unraveled 11% over the past three months. Bank of America stock is up more than 15% from a March low, but still down 9.2% this year.
Goldman Sachs
Results: Goldman Sachs earnings slumped 18% to $8.79 per share on a 5% revenue decline to $12.22 billion.
Expectations: Wall Street expected Goldman Sachs earnings to fall for the fifth quarter in a row, tanking 24% to $8.14 per share while revenue edged 1.3% lower to $12.76 billion.
Investment banking revenue fell 26% to $1.58 billion, slightly higher than the projected decline to $1.2 billion. Net interest income slid 3% over the year to $1.78 billion.
Outlook: Analysts forecast Goldman Sachs full-year earnings will rally 7% to $32.26 per share on 4.2% revenue growth to $49.39 billion.
GS stock eked lower Wednesday after weakening 1.7% Tuesday. Shares lopped 3.5% off its price over the past three months and is down 2% so far this year.
Bank Of New York Mellon
Results: Bank of New York Mellon earnings spiked 30% to $1.12 per share on 11% revenue grow to $4.36 billion.
Average bank deposits declined to $274 billion, down 3% from the previous quarter and 13% from Q1 2022. Net interest revenue bolted 62% over the year to $1.13 billion
Expectations: FactSet analysts guided Bank of New York Mellon to report a 30% spike 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 bolt 68.6% to $4.89 per share on 8.3% revenue growth to $17.74 billion.
BK stock inched 0.8% higher Wednesday to 45.23. Shares rose 1.3% Tuesday after results. BK stock retreated roughly 8% over the past three months and dipped 0.6% in 2023.
Morgan Stanley
Results: Morgan Stanley earnings retreated 15.8% % to $1.70 per share while revenue eased 2% to $14.5 billion.
Expectations: Wall Street forecasts had Morgan Stanley earnings swooning 19.3% to $1.63 per share while revenue weakened 5.6% to $13.97 billion.
Investment banking revenue tumbled 23.7% over the year to $1.25 billion, slightly above analyst estimates of $1.13 billion. Net interest income rose 6% to $2.35 billion. Deposits declined to $347.52 billion, down 3% from the prior quarter and 4% from last year, respectively. Analysts expected deposits to edge up for the second quarter in a row.
Outlook: FactSet predicts Morgan Stanley earnings climb 6% in fiscal 2023 to $6.75 per share. The consensus foresees revenue increasing 4% to $55.87 billion.
MS stock rose 0.6% to 90.41 Wednesday after sliding nearly 2% in early trading following results. Shares retreated 6.4% over the past three months but is up 6.3% this year.
U.S. Bancorp
Results: U.S. Bancorp earnings jumped 17% to $1.16 per share while revenue spiked 28% to $7.175 billion.
Expectations: Wall Street saw U.S. Bancorp earnings surging 13% to $1.12 per share. The consensus had revenue rocketing 27.5% to $7.14 billion.
Average total deposits increased to $510.32 billion, up 5.9% from year-end and 12.3% from Q1 last year. Experts projected average deposits would rise to $515 billion. Net interest income ballooned 45% over the year to $4.67 billion.
Outlook: Analysts project U.S. Bancorp fiscal 2023 earnings rallying nearly 29% to $4.75 per share. Revenue is expected to pop 20% to $29.23 billion.
USB stock surged 2.3% Wednesday following results. Shares tumbled 21.5% over the past three months and is down 17.5% this year.
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