Bank of America's Q2 net rises 40% :: Namibia Internet Gateway cc ::

Articles: Bank of America's Q2 net rises 40%

Posted by admin on Thursday, July 15, 2004 - 02:26 AM

The Charlotte, N.C.-based company (BAC: news, chart, profile) reported quarterly earnings of $3.85 billion, or $1.86 per share, up from its year-ago profit of $2.74 billion, or $1.80 per share. There were a greater number of shares outstanding in the latest quarter than in the prior year.
In short, in the first full quarter since it acquired FleetBoston Financial, Bank of America's revenues increased 2 percent, while expenses fell 6 percent. "Bank of America did not blow out numbers similar to some other early reports," said Fox-Pitt Kelton analyst John Balkind in a research report. "Results were decent, but likely not enough to get the stock going today after a strong recent move." Bank of America's shares fell 83 cents to $84.30. The average estimate of 20 analysts polled by Thomson First Call was for a profit of $1.74 per share in the June 2004 period. The latest results include expenses related to the company's FleetBoston merger of $125 million on a pretax basis, or 4 cents per share. Broad-based gains Bank of America attributed the better-than-expected results to the continued strong performance of its consumer-banking business, improvement from its commercial-banking operations, record investment-banking income, higher trading results and tight control over core expenses. Indeed, the tighter expenses -- $206 million in cuts, or about 6 percent of the combined expenses at Fleet and Bank of America -- exceeded expectations of Morgan Stanley analyst Betty Graseck. Bank of America "is ahead of schedule on the integration ... risk from the (Fleet) merger is declining," she said. But in a conference call with analysts Wednesday, Chief Financial Officer Marc Oken said that the bank's core results were actually in line with analysts' expectations and that profits were boosted by $795 million in securities gains during the quarter. "When we translate all of that, we come in line with what we've been telling you," Oken said. Bank of America expects to take $800 million in charges this year related to the FleetBoston merger, Oken said. But the bank is hoping to trim $1.1 billion to $1.3 billion in costs by the end of 2005. Meanwhile, Oken said the bank has been paring assets that are interest-rate sensitive. He said Bank of America doesn't expect to get squeezed as interest rates rise. "We don't anticipate any more than normal run-off as rates increase," Oken said. Bank of America's total revenue came in at $13.02 billion, up from $9.63 billion in the year-earlier second quarter.

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