(Investopedia) - Bank of America (BAC) reported third-quarter results above analysts' estimates Tuesday morning, as revenue rose year-over-year and profit fell by a smaller amount than expected.
The company reported $25.34 billion in revenue, above last year's $25.17 billion and the $25.28 billion consensus projection of analysts compiled by Visible Alpha. The key banking metric of net interest income (NII) came in at $13.97 billion, down from $14.38 billion a year ago but better than the $13.85 billion expectation.
Bank of America posted profit of $6.90 billion, or $0.81 per share, down from $7.8 billion and $0.90, respectively, the same time last year. Analysts were expecting a larger drop to $6.45 billion, or $0.75 per share.
Bank of America shares rose by more than 1.5% in morning trading soon after the report. The company's shares are up roughly 25% through Monday's close. The KBW Banking Index (BKX) was recently up 0.4%.
Rivals JPMorgan, Wells Fargo Also Topped Q3 Estimates
Big bank earnings season kicked off last Friday, with JPMorgan Chase (JPM) and Wells Fargo (WFC) reporting better-than-expected third-quarter results, which helped Bank of America shares rise 5%. They are up almost 25% year-to-date through Monday's close.
The earnings reports come less than a month after the Federal Reserve cut interest rates for the first time since 2020. Analysts have said the cuts should boost bank earnings in future quarters as deposit costs fall and mergers and acquisitions (M&A) activity picks up.
By Aaron McDade
