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Bank of America Q2 earnings top estimates, revenues miss

Bank of America (NYSE: BAC) reported higher earnings and revenues for the second quarter. While earnings exceeded the market’s expectations, revenues missed. The stock dropped modestly during Wednesday’s premarket session, following the earnings report.

Bank of America (BAC) stock gains on Q2 earnings beat; revenues miss estimates

Second-quarter net income rose to $7.3 billion or $0.74 per share from $6.8 billion or $0.63 per share in the same period of last year.

In the Consumer Banking segment, net income rose 13% to $3.3 billion, while the Global Wealth and Investment Management segment registered a profit of $1.1 billion, up 11%. Global Banking net income rose 9% to $1.9 billion.

Driving the bottom-line growth, revenue, net of interest expense, moved up 2% annually to $23.1 billion during the three-month period. Net interest yield was 2.44%, up 3 basis points from last year. Provision for credit losses remained broadly unchanged at $857 million during the quarter, while book value per share rose 10% to $26.41.

Provision for credit losses remained broadly unchanged at $857 million during the quarter, while book value per share rose 10%

Net interest income rose 3%, helped by increased interest rates and growth in loans and deposits. The top line, however, came in slightly below the forecast.

“Diluted EPS grew seventeen percent from the year-ago quarter, aided in part by the repurchase of seven percent of our shares in the past twelve months as book value per share grew ten percent and capital and liquidity measures strengthened. We have recorded eighteen consecutive quarters of positive operating leverage while consistently making significant investments in the franchise,” said CFO Paul Donofrio.

Also see: Bank of America Q1 2019 Earnings Call Transcript

During the quarter, the bank repurchased $6.5 billion in common stock and paid $1.4 billion in common dividends to shareholders.

Bank of America’s stock dropped 1% in Wednesday’s premarket trading, after closing the previous session lower. The stock, which is currently trading close to the levels seen six months ago, lost 4% in the past twelve months.

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