Shares of Bank of America Corporation (NYSE:BAC) dipped more than 1 percent, to $15.63 Wednesday after the second-largest U.S. bank by assets reported a quarterly profit below estimates, with revenue slightly below forecasts. The first quarter reversed a surprise loss in the same period a year ago when it was hit with $6 billion for litigation expenses.
Bank of America reported fiscal first-quarter net income of $2.98 billion, or 27 cents per share, on revenue of $21.42 billion, compared with a loss of $514 million, or an earnings-per-share loss of 5 cents, on revenue of $22.7 billion a year ago. Wall Street had expected Bank of America to report net income of $3.35 billion, or earnings per share of 29 cents, on revenue of $21.5 billion, according to analysts polled by Thomson Reuters.
Bank of America’s litigation expense fell to $370 million from $6 billion a year earlier.
Bank of America's results come a day after JPMorgan Chase & Co., the biggest U.S. bank by assets, saw its quarterly profit gain 12 percent from a year go to nearly $6 billion after revenue from its fixed-income trading unit rebounded. Meanwhile, Wells Fargo & Co. saw its quarterly profit decline 3 percent from a year earlier as expenses rose, marking the bank's first profit drop in more than four years.
Bank of America disappointed investors in January after reporting an 11 percent drop in fourth-quarter profit, largely due to lower revenue from fixed-income trading. Revenue from that division fell more than 20 percent, to $1.46 billion, driven by weakness in credit and mortgage trading.
The Charlotte, North Carolina-based company shocked investors in November after it lowered its third-quarter profit by $400 million as part of a revision, citing legal expenses related to its foreign exchange business. Bank of America agreed to pay $250 million in fines to the Office of the Comptroller of the Currency, which regulates and supervises national banks. The bank also paid more than $16 billion during the third quarter to resolve allegations of mortgage-related misconduct ahead of the 2008 financial crisis.
Bank of America's stock has tumbled more than 11 percent this year dropped more than 3 percent in the last 12 months.
Ahead of the opening bell Thursday, Citigroup Inc. and Goldman Sachs Group Inc. will report results.