Bank of America (BAC) put out earnings and the stock started selling off.
BAC reported third quarter net income declined 32 percent to $3.70 billion from $5.42 billion a year earlier. Diluted earnings per share fell 31 percent to $0.82 from $1.18. Revenue net of interest expense on a fully taxable-equivalent basis declined 12 percent to $16.30 billion from $18.49 billion in the third quarter 2006.
Lower net income resulted from a $1.33 billion decline in earnings in Global Corporate and Investment Banking given the significant disruption in the financial markets during the quarter. Provision expense increased $865 million due to consumer and small business credit costs rising from post bankruptcy reform lows, growth and seasoning in various portfolios and stress in several portfolios driven by the weakened U.S. housing market.
Unprecedented market disruptions hurt trading results. As a result, Global Corporate and Investment Banking net income fell 93 percent to $100 million from $1.43 billion a year earlier.
Not a stellar quarter
Douglas A. McIntyre
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