Wednesday, April 18, 2012

Bank of America earning estimates report april 19 2012

Bank of America earning estimates report april 19 2012 : Bank of America is scheduled to walk back into the earnings spotlight bright and early Thursday morning.The Charlotte, N.C. bank is now the last of the biggest banks to report and, after its stock went soaring out of the gate this year, the bank may be in a “show me state” even more so than the others. J.P. Morgan had what were widely viewed as strong results and saw its stock fall.

That’s a possibility for BofA, especially as several analysts have already cut the stock, saying the earnings prospects are not strong enough to rationalize a 60% year-to-date rally.

One sign of how unsure investors are of tomorrow: The shares of Bank of America ended Wednesday totally flat. Zero percent change.

For an example of why tomorrow morning might be look murky, turn to Citigroup’s earnings from Monday.

Citi’s results included a hefty “debit-valuation adjustment” charge. The dreaded DVA has become a quarterly headache for banks. The accounting charge is tied to the value the market ascribes to the bank’s outstanding debt. Citi argued analysts don’t count it as earnings, good or bad.

BofA is likely to face the same issue. The open market has gained confidence in BofA debt recently as the bank looks stronger (despite what fake press releases say).

In the fourth quarter it booked a $500 million loss and this first quarter likely saw that trend steepen.

Analysts expect earnings, excluding DVA, of 12 cents a share on revenue of $22.5 billion, both down from the prior year.

Here’s what else to watch out for from the nation’s No. 2 bank by assets:

Cost cuts – The bank is unlikely to deliver details about phase two of Project New BAC, WSJ has reported. That’s going to lead to an awful lot of questioning from analysts, who spent much of last quarter’s conference call on costs and were told they’d get answers after the work was done in April.

Mortgages: The good side – Wells Fargo, J.P. Morgan and U.S. Bancorp all touted strong mortgage origination volumes and booming revenue from the industry as refinancings heat up. BofA has moved thousands of employees away from creating mortgages into handling soured mortgages, but CEO Brian Moynihan has said the bank wants to keep delivering mortgages when it helps customers. The bank has a lot of those still, so will it also benefit from the mortgage gains or will it cement its fall from the mortgage top?

Mortgages: The bad side – Particularly interesting will be BofA’s tone about Fannie Mae, the government entity it has now stopped dealing with after getting fed up with Fannie requesting the bank buy back mortgages. Did that February decision lead to more repurchase request or have the two taken deep breaths?

Capital – After BofA shares touched above $10 last month, an untrue market rumor spread that it would sell shares. The rumor was shot down quickly by the bank. Moynihan has spent much time combating that speculation, but asset sales are still a possibility. BofA will give it another go tomorrow at convincing the world it is on track for Basel III and needs no dilutive share sale to help.

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