Before the bell on Thursday financial services giant Bank of America Corp (BAC) posted its fourth quarter earnings report showing a dramatic drop in profits due to mortgage-related charges.
The Charlotte, North Carolina-based company reported fourth quarter earnings of $700 million, or 3 cents per share, down -65% from the $2 billion, or 15 cents per share, earned in the same period a year earlier. According to Thomson Reuters this adjusted profit was a slight beat to Wall Street expectations, as analysts were estimating the company would earn 2 cents per share.
Bank of American’s quarterly report included a number of one-time items that contributed to the fall in profits. Included in these items were about $5 billion in charges to use for its share of settlements with government regulatory agencies in response to mortgage and foreclosure controversies.
Profits were helped by a bit by lower provision for bad loans, an +58% increase in investment banking fees, and a broad cost-cutting plan enacted in 2011.
Revenue for the quarter dropped -25% to $18.66 billion. Analysts were expecting revenue of $21.03 billion.
Chief Executive Brian Moynihan said Thursday that the bank has entered 2013 “strong and well positioned for further growth.”
Shares of Bank of America were down 17 cents, or -1.44%, during premarket trading on Thursday. The stock is up +78.21% over the past year.
The Bottom Line
Shares of Bank of America (BAC) have a .34% dividend yield, based on last night’s closing stock price of $11.78. The stock has technical support in the $10-$10.50 price area. If the shares can firm up, we see overhead resistance around the $12-$13.50 price levels.
Bank of America Corp (BAC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.