Bank Of America Corp (NYSE:BAC) reported its earnings for the fourth quarter on Thursday before the market opened in the midst of a mixed and challenging financial earnings season. Earnings per share for the first quarter were listed as $0.31 while the company’s revenue for the period was $27.3 billion billion. Analysts had expected the bank to report earnings of $0.12 on revenue of $22.51 billion. The company’s EPS including all items was $0.03.
The news gives the bank a hefty drop over the same period last year. In Q1 2011 the company announced earnings of $0.17 per share and revenues of 22.51 billion. In the first quarter of last year the bank announced revenues of $32.71 billion. The large drop in revenue seen today is significant even when compared with other financials. This earnings season the financial sector has been hard hit by earnings below their figures from a year previous. Some, like Goldman Sachs, have managed to still raise earnings but other have failed to do that.
The credit situation in the last quarter improved with delinquency rates down on credit and mortgage applications up. Consumer spending increases in the sector have improved spending on consumer credit cards as seen by American Express (AXP) yesterday. However these factors may help businesses there is no calming the constant drops in revenue seen by the banking sector.
The banking sector in North America is in a state of flux, recovering from the 2008 financial crisis and facing structural changes in the sector as well. Investment banking is particularly hard hit as investors are unwilling to part with their money as they were this time last year. Bank of America’s Merrill Lynch investment firm was hit just as the other investment banks were this earnings season. Revenues are down for almost all investment houses and it seems difficult for any to buck the trend.
Bank of America is working to improve itself and its situation and that should come as good news to those previously invested in the company. The bank is currently undergoing a $5 billion cost cutting plan in order to improve its margins. That plan is to be completed by year’s end 2013.
Bank of America Corp will open later this morning at 8.93. The company is slightly down a day after Wednesday’s trading which did few company’s much good. If the other Bank’s results and the market’s are to be taken as a guide to today’s performance the market will probably be mixed but slightly down on the stock.