Wednesday, October 17, 2012

2 Big Earnings: Bank of America Corp (NYSE:BAC), PepsiCo Inc. (NYSE:PEP)

Bank of America Corp(NYSE:BAC) earned $340 million during the third quarter, a fall of 95 percent from a year earlier as higher provisioning for bad loans hit profits.

The bank posted a jump in revenues from bond trading while revenues from mortgages rose by a quarter.

On Wednesday the bank posted net earnings of nil per share, for the quarter, compared with 56 cents a share a year earlier.

Analysts' average forecast was a loss of 7 cents per share.

The bank had set aside $1.8 billion in the quarter to cover bad loans, down from $3.4 billion a year earlier.

How Should Investors Trade BAC Now? Find Out Here

The bank seems to be still haunted the acquisitions that the company made during the financial crisis. In September it had agreed to pay $2.4 billion to settle claims which alleged that it had hidden crucial information from shareholders when it had bought Merrill Lynch at the height of the crisis.

The bank also had to buy back mortgages worth $3.8 billion in the third quarter, acceding to demand from investors who had bought mortgage-backed securities.

In order to boost profits the bank had also launched a cost-cutting program with the aim to save $8 billion in annual expenses. The bank said it was on track to attain its savings goal.

Shares of BAC are trading flat at $9.45.

Meanwhile cola company, PepsiCo, Inc.(NYSE:PEP) reported a 5 percent in net income in the third quarter as the company spent more on bolstering its existing brands and developing new products to prepare for the future.

For the period ended Sept. 8, PepsiCo said it earned $1.9 billion, or $1.21 per share. That's compared with $2 billion, or $1.25 per share, a year ago.

Total revenue fell 5 percent to $16.65 billion, partly because of unfavourable currency exchange rates and the refranchising of its business in China and Mexico.
Analysts expected revenue of $16.96 billion.

Shares of PEP fell 0.33% to $70.07.

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