Sage Investment Club

  • Banks started the earnings season off on solid footing.

  • JPMorgan beat on top and bottom lines for Q4.

  • Bank of America beat EPS consenus by about 10%.

  • Bank of New York Mellon stock fell on a revenue miss.

A flurry of banks fired the starter pistol of earnings season early on Friday. JPMorgan (JPM) and Bank of America (BAC) were first out of the gate with solid beats on the top and bottom lines, while Bank of New York Mellon (BK) missed Wall Street’s revenue consensus for revenue by $220 million.

JPMorgan earnings results

JPMorgan reported adjusted earnings per share (EPS) of $3.56, a healthy 46 cents above Wall Street’s average analyst projection for the fourth quarter. Quarterly reported revenues of $34.5 billion also beat consensus by $270 million and rose nearly 18% YoY. Net income of $11 billion was up 6% YoY. Net interest income rose 48% YoY to $20.3 billion. All in all it does not seem like CEO Jamie Dimon’s talk last summer of serious recession showed up in the data.

JPMorgan stock fell 2.9% to $135.50, however, after the bank announced it was seeking restitution for allegedly being defrauded by its acquisition of Frank, which it purchased during the pandemic for $175 million. JPMorgan says the financial startup’s purported 400,000-strong customer base was largely fake.

Bank of America earnings results

Bank of America stock dropped 2.5% to $33.60 despite a beat on top and bottom lines. Adjusted EPS of $0.85 overpowered Wall Street consensus by 8 cents a share. Revenue of $24.53 billion rose 11% YoY and beat analyst estimates by $360 million.

Net interest income rose 29% YoY to $14.7 billion on the back of higher interest rates coupled with decent loan volume growth.

A decline in investment bank and asset management fees cut non-interest income by 8% YoY.

Bank of New York Mellon earnings results

Bank of New York Mellon stock dropped 1.9% to $47.24 after its Q4 revenue of $3.9 billion missed Wall Street estimates by $220 million. The quarter was not all bad though. Adjusted EPS of $1.30 was 10 cents ahead of consensus, and net interest revenue increased 56% YoY due to a higher interest rate environment. The investment segment lost $449 million due to the decline in the value of securities owned by the bank.

JPM, BAC, BK stock chart

Over the past year JPMorgan stock has outperformed its two counterparts here with a loss of 17.2%. Over the same period Bank of New York Mellon stock has lost 24.2% and Bank of America stock has lost 29.5%.


JPM, BAC, BK daily stock comparison over 1-year timeframe

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