Bank of America Corp (NYSE:BAC) shares lost more than 2% of their value on Wednesday morning after the firm released its earnings report for the first quarter of 2014. The numbers, which were released before the market opened in New York, showed a company squeezed by changes in the financial industry and still dealing with problems from the financial crisis.
In the first quarter of 2014, Bank of America Corp (NYSE:BAC) lost five cents per share on revenue totaling $22.76 billion. Before adjustments the bank said that it earned 35 cents per share. The biggest hit to the firm’s profits was a 40 cent litigation charge: the result of a case it recently settled with regulators in a New York court. Bank of America Corp (NYSE:BAC) is still struggling, but there may be light at the end of the tunnel.
Many value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More
Bank of America revenue positive
One of the more interesting numbers in the Bank of America Corp (NYSE:BAC) report was the $22.76 billion the company recorded in revenue. Analysts were expecting the firm to show revenue of around $22.33 billion, and compressed revenue has been a trend in the financial earnings seen so far this quarter.
2013 was the best year for Bank of America Corp (NYSE:BAC) since the financial crisis, and the mistakes of recent years are at the forefront of shareholder’s minds. Despite their hopes, the company has yet to manage a real exit from those issues, and they are likely to continue impacting the bank for some time to come.
Bank of America leaves 2008 behind
It is well time for the 2008 financial crisis to be boxed up and put on a shelf. Bank of America Corp (NYSE:BAC) shareholders have been dealing with the results of acquisitions it made in the depths of the crisis since it took its toll on the world economy.
The company’s massive 40 cent charge relating to the sale of bad mortgages to Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) during the crisis is hoped to form an end to that ordeal and the promise of a fresh start for the company. Part of that charge was, however, set aside to cover future litigation costs. The $6 billion the company added to its court settlement kitty may not be enough to cover everything in its way.
Without some space between it and the 2008 financial crisis Bank of America Corp (NYSE:BAC) will never be able to perform as investors wish. The 30% increase in the company’s stock price in the last twelve months relies on an end to the company’s legal troubles and a hope for increased revenue into the future. Until 2008 has been left behind, it’s difficult to bet on a bank valued at 17 times earnings.