Earnings Preview : Bank of America Corp. (BAC) First Quarter 2010
Wednesday, April 07, 2022 10:47 AM

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Bank of America Corp. (BAC) is scheduled to report its results after the market closes on April 15, 2010. Bank of America guidance for 2010 remains positive as the economy is recovering at a faster pace than usual and the company has experienced a stabilization of their credit costs, particularly in the consumer businesses. However, economic conditions do remain fragile and high unemployment rates are still expected, creating an ongoing drag on consumer spending and growth.

Bank of America Corp. is one of the world''s leading financial services companies. Bank of America provides individuals, small businesses and commercial, corporate and institutional clients across the United States and around the world new and better ways to manage their financial lives. The company enables customers to do their banking and investing whenever, wherever and however they choose.

Bank of America's full-year 2009 net income came in at $6.3 billion, compared with net income of $4.0 billion in 2008. Including preferred stock dividends and the negative impact from the repayment of the U.S. government's $45 billion preferred stock investment in the company under the Troubled Asset Relief Program (TARP), income applicable to common shareholders was a net loss of $2.2 billion, or $0.29 per diluted share.  In Q4 2009, the company's net loss came down to $194 million from a loss of $1.8 billion a year earlier. Including dividends on preferred stock and the one-time $4.0 billion negative impact associated with repaying TARP, income applicable to common shareholders in the period was a net loss of $5.2 billion, or $0.60 per diluted share, compared with a net loss of $2.4 billion, or $0.48 per diluted share, in the year-ago quarter.  Results in the fourth quarter reflected continued elevated credit costs, although lower than in the third quarter of 2009.

Analysts' estimates for Q1 2010 range from a low of $-0.15 to a high of $0.26, compared to a consensus estimate of $0.09, with number of estimates being 22 and the co-efficient variance 104.17. Two acquisitions in the current cycle, Merrill Lynch and Countrywide, position BAC for long-term growth and give the company the leverage to emerge from the credit cycle as a dominant player in domestic retail broking and international investment banking, and mortgage servicing. BAC's credit card charge-offs that fell in Q4 2009 are expected to further decline in Q1 2010, with NPL growth peaking in 1H 2010.  

The stock closed at $18.49, up 1.99% on April 6, 2010. Analysts' have rated this stock Overweight with the average price target of $21. Large Cap Bank group looks attractive, driven by an expectation for deceleration in jobless claims/unemployment and a stabilizing real GDP growth rate of 2-2.5%. 

 

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