Following the beginning of the earnings season, top financial institutions like Goldman Sachs and the Bank of America are expected to deliver their quarterly earnings report before Wednesday’s opening session.
Bank of America
Due to the current optimism of most Wall Street analysts following the beginning of the earnings season this month as well as overall upbeat numbers from JPMorgan Chase & Co (NYSE:JPM) and from Wells Fargo’s respective quarterly earnings results, Bank of America (NYSE:BAC) shares are expected to rise after the opening bell on Wednesday as the company delivers upbeat fourth-quarter results.
During the third quarter, Bank of America shares surged as the company posted earnings of 48 cents per share beating most earnings estimates of 45 cents per share. The company also reported a revenue of $22.07 billion beating most analysts forecasts of $21.97 billion. Despite posting positive earnings, the company posted a decline in their fixed-income trading revenue by 22% year over year to $2.152 billion.
For the quarter that ended in December, Bank of America is expected to post earnings of 44 cents per share compared to their earnings of 40 cents per share on the same period last year. Bank of America’s revenue is also expected to come at $21.53 billion higher than their revenue of $20.22 billion from the same quarter last year.
Aside from the earnings report, analysts and investors are also expecting an update from the company regarding the improvement and growth of its operations particularly in loans and credit as some have stated their doubts on a wide loan growth from the company. Others will also be looking at one of the company's major revenue drivers which is their investment banking business.
Goldman Sachs
Goldman Sachs Group (NYSE:GS) is set to deliver its earnings report for the fourth quarter before the opening bell on Wednesday. Some analysts have stated their expectations on the company’s fourth quarter 2017 earnings to take a massive hit for the tax reform set to take place this year. While the company has stated that charges of around $5 billion have been expected by the company.
Following the decline in the trading revenues of financial companies during the previous quarter, the recent news regarding the tax reform from the Republican Senate has spurred market optimism regarding the earnings of banking stocks or financial institutions.
During the previous quarter, Goldman Sachs delivered earnings of $5.05 per share beating most expectations of $4.17 per share in earnings while its revenue was higher at $8.33 billion compared to estimates of $7.54 billion. The company also announced dividends of 75 cents per share during the third quarter, as well as 9.6 million shares, were repurchased at $2.17 billion.
Analysts are expecting earnings of $4.90 per share from Goldman Sachs, which is lower than their earnings of $5.08 during the same quarter last year. The company’s revenue is expected to come in at $7.62 billion for the three months that ended in December.