It's earnings season and the financials are front and center.
Don't have time to sift through press releases and read all the commentary on results?
No problem! I've got your "cheat sheet" here for the big names that have reported so far.
JPMorgan (JPM) reported record profits and revenues in the first quarter. Put simply, they crushed it. The bank reported revenues of $29.85 billion. Those revenues easily beat estimates of $28.4 billion. JPMorgan reported adjusted net income of $9.18 billion. The bank is simply one of the best in the business.
Wells Fargo (WFC) had a bit of a sour note, thanks in large part to its weaker guidance. Investors were not the biggest fans of hearing the CFO expects net interest income to fall by 2%-5% this year. Nevertheless, WFC did put together some solid earnings. Earnings per share of $1.20 handily beat estimates of $1.09. And revenues of $21.6 billion beat estimates of $21.01 billion.
The stock is very cheap, but Wells Fargo seems to be one of the big banks conveying less confidence.
Citigroup's (C) first-quarter 2019 results were a mix of good and bad. Earnings of $1.87 per share beat estimates of $1.78, while revenues declined 2% year over year to $18.57 billion. While Citigroup certainly isn't in any trouble, there does seem to be some stagnation. The earnings boost was primarily related to stock buybacks. Citigroup repurchased 66 million shares in the first quarter, insulating the bottom line for shareholders. When you look at the actual increase in net income, it's disproportionate. Citigroup's net income increased by 2% year over year to $4.71 billion. In comparison, EPS of $1.87 marked an 11.3% increase over last year's first quarter $1.68.
Some analyst estimates put Citigroup's full-year earnings at $7.45 per share. That would mean the bank is trading at under 10x it's full-year estimate. Like most bank stocks, it's a cheap play, but there are some inconsistencies within its performance.
Goldman Sachs Group
Goldman Sachs (GS) reported a similar story. Total revenue fell 13% to $8.81 billion. There's some reason for concern here, as the bank reported declines across multiple segments. Equities declined 24% year over year. Institutional client services declined 18%. Investing and lending declined 14%. Investment management declined 12%. The only area of growth was investment banking, which grew 1%.
Profits for the quarter were $2.25 billion. That breaks down to $5.71 per share. Estimates had expected EPS of $4.89. The bank created those earnings largely from cutting back on compensation for employees.
M&T Bank's (MTB) big highlights revolved around strong, year-over-year net income growth. Compared to Q1 2018, net income increased 37% to $483 million. Diluted EPS increased 50% to $3.35, vs. $2.23 in Q118. The bank also reported a better return on equity and assets relative to Q118. Revenues of $1.55 billion marked a small improvement from last year's $1.43 billion.
Bank of America
Bank of America's (BAC) first quarter revenues were rather stagnant at $23 billion, but income was solid. Net income increased just under 6% to $7.3 billion, breaking down to diluted earnings per share of $0.70. That is a 13% increase vs. last year's $0.62 per share. Returns on assets and equity also improved year over year. Interestingly, the bank received a downgrade from Jefferies, as the firm believes there are better financial plays.
An investment manager rather than a big bank, I've included BlackRock (BLK) simply because of its size and meaning within the financial industry.
BlackRock has a lot of money under management, and its stock is always one to keep an eye on. In the first quarter the investment Goliath experienced strong capital inflows, indicating an improvement in confidence after the market bloodbath that was December.
Assets under management increased 3% to $6.52 trillion (yes, you read that right). Operating income declined 10% year over year to $1.23 billion, while net income declined 3% to $1.05 billion. The slight decline was felt less on an earnings-per-share basis, thanks to share buybacks. Diluted earnings per share declined 1% year over year to $6.61 per share.
BlackRock's fees were down as management moves to a passive, low-rate approach.