Earnings Report of America’s Biggest Banks.
The announcement presented a positive perspective following a more gloomy forecast from America's largest banks, who took centre stage to start the fourth quarter earnings season. Their results demonstrated ongoing resilience in the face of economic challenges, while several acknowledged they were preparing for a U.S. recession.
Wells Fargo & Company (WFC)
Expectation: According to Wall Street, earnings were expected to fall 56% to 60 cents per share. Earnings per share were predicted to tumble 28% to 85 cents per share, while revenue fell 4.2% to $19.99 billion.
Report: Wells Fargo's earnings have been cut in half, falling to 67 cents a share, while revenue has dropped 5.7% to $19.66 billion.
Following the report, Shares of Wells Fargo were down 3.7% on Friday to $41.26. Despite an almost 10% drop since the beginning of December, shares have been up 5% in the last three months. Nonetheless, the bank's stock dropped 24% in the previous year.
Wells Fargo's earnings have fallen for the previous three quarters, although revenue increased in the third quarter after two consecutive falls.
Net interest income at the bank has increased over the last seven quarters, aided by a recent boost from higher interest rates. Interest income increased by 45% to $13.43 billion in the fourth quarter, above projections of $12.97 billion.
See Wells Fargo’s full earnings report here.
Bank of America Corporation (BAC)
Analysts predicted that Bank of America's earnings would fall for the fourth consecutive quarter in Q4 while revenue would rise for the sixth consecutive period.
Expectations: Earnings were expected to fall 6% to 77 cents a share, while revenue increased 9.8% to $24.17 billion.
Report: Bank of America's earnings increased 3.6% to 85 cents per share, while revenue increased 11.2% to $24.53 billion.
Net interest income increased for the seventh consecutive quarter, rising 30% to $14.83 billion in Q4. The earnings only just outperformed Wall Street's projections of $14.79 billion.
Bank of America Corp, which beat quarterly profit estimates, reversed early declines to gain 2.23%
See Bank of America’s full earnings report here.
Citigroup Inc. (C)
Citi's earnings were expected to decline for the fifth consecutive quarter, while revenue increased for the third time.
Following the end-of-week quarterly announcement, C stock fell over 3% in premarket trading on Friday. The stock is up 19% in the previous three months but down 28% year to date.
Expectations: Earnings were expected to tumble 21% to $1.14 per share, while revenue increased 5.6% to $17.96 billion.
Report: Citi's earnings per share fell to $1.16 while revenue increased 6% to $18 billion.
Net income: $2.5 billion versus $3.2 billion a year ago.
Trading Revenue: Fixed Income $3.16 billion, above expectations. Equities trading was $789 million, below expectations.
Provision for credit losses: $1.85 billion compared to $1.79 billion expected by analysts polled by StreetAccount.
Net interest income increased for the fifth quarter in a row, rising 23% to $13.27 billion. Analysts projected a rise of 17% to $12.7 billion.
See Citigroup’s full earnings report here.
JPMorgan Chase & Co. (JPM)
Expectations: Analysts projected $3.07 earnings per share and $34.3 billion in revenue.
Result: JPMorgan reported earnings per share of $3.57 and revenue of $35.57 billion.
JPMorgan Chase reported fourth-quarter earnings and revenue above estimates, as interest income increased 48% due to higher rates and loan growth.
JPMorgan CEO Jamie Dimon said Friday that the United States economy "currently remains strong" due to well-financed consumers and companies.
JPMorgan shares of the largest bank in the United States by assets gained more than 2% after the company reported fourth-quarter earnings and revenue that exceeded forecasts.
See JPMorgan’s full earnings report here.
BlackRock, Inc. (BLK)
Expectations: Analysts projected earnings per share of $7.86 and a revenue estimate of $4.26B.
Report: BlackRock (BLK) reported fourth-quarter EPS of $8.93, $1.07 better than the analyst's estimate. Revenue for the quarter came in at $4.34B versus the estimate of $4.26B.
BlackRock's fourth-quarter profit dropped 23%.
The closing price of BlackRock's shares was $756.36. It has increased by 0% in the past three months and decreased by -11.15% in the previous twelve months.
In the previous 90 days, BlackRock has had 6 positive EPS adjustments and 3 negative EPS revisions.
See BlackRock’s full earnings report here.
The Goldman Sachs Group, Inc. (GS)
Since 2020, Goldman Sachs' newly established technology and consumer subsidiary have lost the equivalent of $3 billion in pre-tax losses, the firm announced on Friday.
Goldman has reprinted the previous three years of its financial statements to reflect the group's new divisional structure, providing the most extensive details regarding losses associated with its push into consumer banking.
The new businesses include its "Platform Solutions" division, which lost $1.2 billion in the first nine months of 2022, $1.05 billion in the whole year of 2021, and $783 million in 2020.
The fourth-quarter earnings report is set to be issued next week.
According to Bloomberg consensus statistics, analysts expect earnings per share to fall nearly 50% year on year in the fourth quarter due to falling revenues in investment banking and asset management.
The modification, according to Goldman, had no impact on its historical total net revenues, provision for credit losses, operational expenditures, or pre-tax earnings.
