Bank of America and Blackstone Group released their first quarter earnings reports before opening bell this morning. Bank of America reported earnings of 21 cents per share, which was a penny ahead of consensus, on $20.9 billion in revenue, which was a bit ahead of consensus at $20.3 billion. In last year’s first quarter, the bank posted earnings of 25 cents per share and revenue of $21.6 billion.
BlackRock posted adjusted earnings of $4.25 per share, lagging behind the consensus of $4.29 per share, and revenue of $2.62 billion, which also was behind consensus at $2.73 billion. The firm’s profits plunged 20% during the quarter as the financial markets experienced a wave of volatility.
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Low interest rates, tumbling trade revenues weigh on Bank of America’s results
Bank of America’s net interest income was $9.17 billion, compared to last year’s $9.41 billion and the FactSet consensus of $9.89 billion. The bank’s credit loss provision climbed from $765 million to $997 million, while its energy reserves more than doubled to $1 billion. Total deposit balances climbed $64.1 billion to $1.2 trillion, while total loan balances increased $28.4 billion to $901.1 billion. The bank had a Common Equity Tier 1 Capital transition level of $162.7 billion ($157.5 billion on a fully phased-in basis).
Return on average assets was 0.5%, while return on average common equity was 3.8% and return on average tangible common equity was 5.4%. Bank of America’s tangible book value per share climbed 9% to $16.17, while book value per share climbed 7% to $23.12. The Consumer Banking business saw revenue climb to $7.6 billion, while the Global Wealth and Investment Management segment saw revenues plunge to $4.4 billion in the first quarter. Revenue for the Global Banking business was steady at $4.4 billion, while Global Markets revenue fell to $4 billion. The Legacy Assets and Servicing business saw revenues fall $235 million on the back of a decline in loan balances and noninterest income.
Bank of America shares slipped 1.02% to $13.61 in premarket trading this morning.
BlackRock struggles amid falling markets
BlackRocket’s reported income was $3.92 per share or $657 million, which is down from $4.84 per share and $822 million in last year’s first quarter. The firm’s long-term net inflows plummeted from $70.44 billion in the year-ago quarter to $36.08 billion, while it recorded total inflows of $54 billion. The iShares exchange-traded funds segment saw $24.25 billion in inflows during the quarter, which is a decline from $35.48 billion in last year’s first quarter with most of the inflows being poured into bonds.
The firm had $4.74 trillion in assets under management at the end of the first quarter, which is an increase from $4.65 trillion at the end of the year-ago quarter.
BlackRock shares were inactive in premarket trading this morning.