July 18th 2010
(BAC) Bank of America’s Second Quarter 2010 Earnings Beat on Lower Credit Costs
Bank of America Corporation’s (BAC) second quarter 2010 earnings came in at 27 cents per share, 3 cents ahead of the Zacks Consensus Estimate of 24 cents. However, this compares unfavorably with the earnings of 33 cents in the prior-year quarter.
Lower credit costs and sale of non-core assets were primarily responsible for the better-than-expected results. However, pressure on trading and mortgage banking income was the primary offsetting factor. BofA’s trading business includes the Merrill Lynch operation. An increased charge related to the U.K. payroll tax was also among the negatives.
Net income came in at $3.1 billion, down 3% from $3.2 billion in the year-ago quarter. However, after preferred dividends, net income increased 15% year over year to $2.8 billion.
Behind the Headlines
Fully taxable-equivalent revenues net of interest expense were $29.5 billion, down 11% from $33.1 billion in the prior-year quarter, reflecting the absence of year-earlier gains from the sale of BofA’s shares in China Construction Bank and the contribution of a merchant services business.
Net interest income on a fully taxable-equivalent basis was $13.2 billion, up 11% from $11.9 billion in the year-ago quarter. The in