Bank of America Corporation said it reported a profit of $6.2 billion, or 56 cents a share, compared to a year-ago loss of $7.3 billion or 77 cents a share, Market Watch website said. Andrew Marquardt, Evercore Partners analyst said, Bank of America’s third-quarter earnings appeared to total 2 cent a share, after breaking out several one-time items, below his estimate of 19 cents a share.
“Overall it is a very mixed bag of results with significant core miss and barely positive on the quarter, but capital levels improved thanks to one-time gains and a shrinking balance sheet,” Marquardt said in a note. “The core miss was driven entirely by lower-than-expected market-sensitive revenues,” he said.
The latest quarter’s earnings figure included $4.5 billion in positive fair value adjustments and a pretax gain of $3.6 billion from the sale of shares in China Construction Bank. They also included a $1.7 billion gain in trading debit valuation adjustments, and a loss of $2.2 billion related to private equity and strategic investments.
The debit valuation adjustments allow banks to book non-cash gains when the value of their credit quality drops, as it did this quarter on account of the European debt crisis. Meanwhile, the adjusted revenue rose to $28.7 billion, from just under $27 billion.
According to a survey by FactSet Research, Wall Street analysts expected by earnings of 28 cents a share, on revenue of $25.75 billion. “The fair value adjustments on structured liabilities reflects the widening of the company’s credit spreads and does not impact regulatory capital rations,” the bank said.
Besides, it also stated the provisions for credit losses dipped to $3.4 billion from $5.4 billion a year ago and included reserve reductions of $1.7 billion. The bank is based in North Carolina and is an American multinational banking and financial services corporation and is the second largest bank holding company in the United States by assets. It is also the fourth largest bank in the U.S. by market capitalization .
