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Sunday July 14, 2024



Bank of America Posts Results

Bank of America Corporation (BAC) released its first quarter results on Tuesday, April 16. The banking institution reported decreased earnings and revenue for the quarter, causing shares to fall almost 4% after the release of the report.

Revenue came in at $25.8 billion during the first quarter, down 2% from $26.3 billion at this time last year. The results exceeded analysts’ expectations of $25.5 billion for the quarter.

“We reported a strong quarter as our businesses performed well, adding clients and deepening relationships,” said Bank of America CEO, Brian Moynihan. “Our Wealth Management team generated record revenue, with record client balances, and investment banking rebounded. Bank of America’s sales and trading businesses continued their strong 2023 momentum this quarter, reporting the best first quarter in over a decade. Continued strong earnings and strong expense management both position our company to continue to drive our market leading positions across our businesses.”

The company reported net income of $6.7 billion for the quarter or $0.76 per diluted share. This is down from $8.2 billion or $0.94 per diluted share in the same quarter last year.

Bank of America’s Consumer Banking segment brought in net income of $2.7 billion but was down from net income of $3.1 billion in the same quarter last year. The segment added 245,000 new consumer checking accounts, marking the twenty-first consecutive quarter of growth. The company’s Global Wealth and Investment Management segment garnered net income of over $1 billion with client balances of approximately $4 trillion, up from net income of $917 million in the prior year’s quarter. The company’s Global Banking segment generated net income of $2 billion, down from net income of $2.6 billion.

Bank of America Corporation (BAC) shares ended the week at $36.97, up 1.7% for the week.

Johnson & Johnson Releases Earnings Report

Johnson & Johnson (JNJ) reported its first quarter results on Tuesday, April 16. Despite an increase in sales and revenue, the pharmaceutical company’s stock fell over 2% after the earnings report was released.

The company posted revenue of $21.4 billion during the quarter. This was up over 2% from $20.9 billion during the same quarter last year, in line with analysts’ expected revenue.

“Johnson & Johnson’s solid first quarter performance reflects our sharpened focus and the progress in our portfolio and pipeline,” said CEO of Johnson & Johnson, Joaquin Duato. “Our impact across the full spectrum of healthcare is unique in our industry, and the milestones achieved this quarter reinforce our position as an innovation powerhouse.”

Johnson & Johnson reported net earnings of $5.4 billion or $2.20 per diluted share. This was up from a net loss of $491 million or $0.19 per diluted share, last year at this time.

Johnson & Johnson’s earnings were supported by a strong showing in medical device sales of $7.8 billion, up over 4% year-over-year. The company’s pharmaceutical segment posted revenue of $13.6 billion during the quarter, up 1% from the prior year. The company reported that, for the first quarter, $3.5 billion was invested in research and development. In addition, Johnson & Johnson paid $2.9 billion in dividends to shareholders during the quarter. The company revised its full-year 2024 guidance, and now anticipates sales in the range of $88 billion to $88.4 billion for the year, compared to the previous range of $87.8 billion to $88.6 billion.

Johnson & Johnson (JNJ) shares ended the week at $147.91, remaining relatively unchanged for the week.

United Airlines Earnings Take Off

United Airlines Holdings, Inc. (UAL) posted its first quarter earnings report on Tuesday, April 16. The airline company reported revenue that exceeded expectations, causing its stock to rise more than 17% following the release of the report.

The company reported total operating revenue of $12.54 billion for the quarter, up almost 10% from $11.43 billion during the same quarter last year and above analysts’ expected revenue of $12.45 billion.

“I want to thank the United team for working so hard this quarter to deliver strong operational metrics for our customers and sharpen our focus on safety, while producing excellent financial results for our shareholders,” said United Airlines CEO, Scott Kirby. "We have adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver. And, we will use those planes to capitalize on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs."

United Airlines posted a quarterly net loss of $124 million or $0.38 per diluted share. During the same quarter last year, the company reported a quarterly net loss of $194 million or $0.59 per diluted share.

During the first quarter, United’s total revenue per available seat mile (TRASM) increased 0.6% compared to its first quarter of fiscal 2023. United Airlines announced an updated fleet plan and anticipates receiving 61 new narrowbody aircraft in 2024, a decrease from the 101 expected at the beginning of the year. The airline attributed the reduction in aircraft production to manufacturing and certification delays. For the second quarter, United projects profits of $3.75 to $4.25 per share.

United Airlines Holdings, Inc. (UAL) shares ended the week at $51.38, up 21.8% for the week.

The Dow started the week of 4/15 at 38,075 and closed at 37,986. The S&P 500 started the week at 5,150 and closed at 4,967. The NASDAQ started the week at 16,276 and closed at 15,282.

Treasury Yields Fluctuate

U.S. Treasury yields rose early in the week as consumer data revealed consumer spending remains strong despite high inflation. Yields dipped later in the week while unemployment claims held steady from previous weeks and investors digest the Federal Reserve’s wait-and-see approach for interest rates cuts.

On Monday, the Commerce Department announced that retail sales increased 0.7% for March, which exceeded analysts’ expectations of a 0.3% rise for the month. However, March retail sales decreased from 0.9% in February.

“Strong sales growth in March salvaged an otherwise mediocre quarter for retailers,” said chief investment officer at Plante Moran Financial Advisors, Jim Baird. “Q1 growth is not going to generate a round of high fives, but closing out the quarter on a strong note should allow them to breathe a sigh of relief and a glimmer of hope that momentum could carry through into the coming months.”

The benchmark 10-year Treasury note yield opened the week of April 15 at 4.53% and traded as high as 4.70% on Tuesday. The 30-year Treasury bond opened the week at 4.63% and traded as high as 4.81% on Tuesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment remained unchanged at 212,000 for the week ending April 13. Continuing unemployment claims increased by 2,000 to 1.81 million.

"Overall, layoffs remain low," said chief U.S. economist at High Frequency Economics, Rubeela Farooqi. "We expect a continuation of the current trend, with a further adjustment in the labor market coming from a moderation in hiring rather than a surge in firings."

The 10-year Treasury note yield finished the week of 4/15 at 4.63%, while the 30-year Treasury note yield finished the week at 4.71%.

Mortgage Rates Surge Past 7%

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, April 18. The survey showed 30-year fixed mortgage rates surpassing 7% for the first time in 2024.

This week, the 30-year fixed rate mortgage averaged 7.10%, up from last week’s average of 6.88%. Last year at this time, the 30-year fixed rate mortgage averaged 6.39%.

The 15-year fixed rate mortgage averaged 6.39% this week, up from 6.16% last week. During the same week last year, the 15-year fixed rate mortgage averaged 5.76%.

“The 30-year fixed-rate mortgage surpassed 7% for the first time this year, jumping from 6.88% to 7.10% this week,” said Freddie Mac’s Chief Economist, Sam Khater. “As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year. Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future.”

Based on published national averages, the savings rate was 0.46% as of 04/15. The one-year CD averaged 1.81%.

Editor’s Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.

Published April 19, 2024

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