Bank of America Corp (NYSE:BAC) will report its fourth-quarter 2013 financial results on Jan. 15, 2014. Earnings are expected to surge about nine times from last year. The results are scheduled to be released at 7 a.m. ET, followed by an investor presentation at 8:30 a.m. ET.
Wall Street expects BAC to report earnings of 26 cents a share, according to analysts polled by Thomson Reuters. In the same quarter last year, it reported earnings of 3 cents a share.
Bank of America earnings managed to beat the Street view thrice in the last four quarters, with upside surprises in the range of 11 – 50 percent. The consensus view declined by 2 cents over the past 90 days when it was estimated at 28 cents.
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During the last 30 days, six analysts cut their EPS outlook for the quarter. This underscores the tough operating environment for the bank.
Quarterly revenues are expected to fall 2.3 percent to $21.15 billion from $21.66 billion in the same quarter last year.
Despite the recent backup in long-term rates, net interest margins (NIMs) are expected to remain under pressure in the fourth quarter given sluggish loan growth and flat/lower short/medium term rates. However, NIMs are expected to rise modestly on a sequential basis.
Loan growth remains sluggish. According to Federal Reserve H.8 data for the largest 25 US banks, average loan growth remained weak, up 0.1 percent un-annualized sequentially. On a period-end basis, total loans are up 0.4 percent, following a 0.3 percent increase in the third quarter.
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Deutsche Bank analyst Matt O'Connor assumes slightly better performance in the last two weeks of the year (which tend to benefit from seasonal factors). He also believes weaker than expected fixed income, currency and commodity (FICC) trading revenues will be mostly offset by stronger than expected investment banking fees and mostly in line equity trading.
Mortgage production revenues continue to decline reflecting a drop in purchase volumes, and slower refinancing activity as the refinance boom is seemingly over. Lower volumes combined with continued gain-on-sale margin pressure should lead to lower mortgage revenues across the industry.
Investors will be focusing on loan and mortgage origination trends, and keeping an eye on operating expenses to get sight of the cost control measures of the bank.
Loans are one of the key sources of revenue for a bank, which gets interest income via lending. A reliable leading indicator for loan growth is the outflow of deposits. A borrower typically first uses its deposits to meet business needs and then draws down on its line of credit.
The market will also pay attention to trading revenues and investment banking fees – two of the biggest contributors to the topline.
Looking ahead, the Street may want color on capital market strategies given certainty surrounding Volcker and capital/liquidity rules. They may also look for company's potential actions when FICC trading revenues don't rebound.
Among the major events during the quarter, BAC's Countrywide unit won final approval of $500 million class-action settlement with investors, who claim they were misled by its Countrywide unit into buying risky mortgage-backed securities ahead of the financial crisis.
For the third quarter, Charlotte, North Carolina-based Bank of America reported net income applicable to common shareholders of $2.22 billion or 20 cents a share, compared to a net loss $33 million or breakeven per share in the prior-year quarter. Total revenue, net of interest expense, for the quarter grew to $21.53 billion from $20.43 billion in the same quarter last year.
Since reporting its third quarter results, BAC stock gained 16 percent and 43 percent in the past year. BAC shares, which has a market cap of more than $175 billion, trade 12.75 times its 2014 consensus EPS estimate.
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Gene J. Puskar/AP WASHINGTON -- U.S. retail sales fell unexpectedly in January and the number of Americans filing new claims for unemployment benefits rose last week, in the latest signs of slowing economic growth early in the first quarter. The Commerce Department said Thursday retail sales fell 0.4 percent last month, led by a drop in automobile sales. Economists polled by Reuters had forecast retail sales unchanged in January. Sales in December were revised to show a 0.1 percent fall instead of the previously reported 0.2 percent rise. The second month of declines in sales likely reflected frigid temperatures across many parts of the country. "The weakness we saw in retail sales is unfortunately weather-related and we are clearly seeing that the first quarter growth is slower than we anticipated," said Peter Cardillo, chief market strategist at Rockwell Global Capital in New York. "But I still don't think this data is trend changing." Stocks opened lower following the retail sales figures. The dollar slipped and the yield on the benchmark 10-year Treasury note fell to session lows of 2.74 percent. Stripping out automobiles, gasoline, building materials and food services, so-called core sales fell 0.3 percent after rising 0.3 percent in December. Core sales correspond most closely with the consumer spending component of gross domestic product. Economists had expected this category to advance 0.2 percent in January. In a separate report, the Labor Department said initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 339,000 in the week ended Feb. 8. Economists polled by Reuters had forecast first-time applications for jobless benefits slipping to 330,000. The reports added to data on factory activity and employment in suggesting a loss of steam in the economy this quarter, in part because of the unseasonably cold weather and payback after the brisk 3.7 percent annual growth pace in the second half of last year. Economists are yet to quantify the effect of the relentlessly freezing temperatures, which have left large parts of the country shivering since December. Last month, receipts at auto dealers fell 2.1 percent. It was the second consecutive month of decreases. Auto manufacturers complained last week that frigid temperatures had hurt sales. Retail sales excluding automobiles were flat. Sales of building materials and garden equipment rose 1.4 percent. There were also gains in receipts at electronics and appliance stores. However sales at clothing retailers and at sporting goods, hobby, book and music stores fell, as did receipts at furniture shops.
Alamy Diners want more than Cheddar Bay biscuits these days, and no one knows this better than Red Lobster parent Darden Restaurants (DRI). The casual dining juggernaut behind Red Lobster, Olive Garden, and several smaller chains has been posting uninspiring financial results lately. We'll get another fresh snapshot when it reports quarterly results in two weeks. The last time out was a disaster. Back in September, Darden served up lower-than-expected profitability numbers as business fizzled out at its two marquee concepts. Same-restaurant sales -- an important metric for the industry as it measures how well the average eatery is holding up -- fell 4 percent at Olive Garden and 5 percent at Red Lobster. Darden's other restaurants are faring better for the most part, but it's not as if LongHorn Steakhouse, Bahama Breeze, and Capital Grille can move the needle here. Olive Garden and Red Lobster combine to account for 71 percent of Darden's business. Olive Garden is trying to liven things up by introducing a burger into its menu this month. Red Lobster may want to see what it can do to appeal to a broader audience, too. Have a Burger with Your Unlimited Breadsticks Olive Garden's Italiano Burger is rolling out across the chain this week. It's a hamburger, dolled up with prosciutto, mozzarella cheese, arugula, and marinated tomatoes. The buns are dressed up with a garlic aioli spread. Parmesan garlic fries come on the side. It's clearly Olive Garden's attempt to put an Italian spin on the traditional burger, but naturally there's no reason why you can't strip the sandwich of the Italian garnishes and just order your burger plain. Olive Garden is also introducing a sausage and bell pepper sandwich, but it's a safe bet that it's the Italiano Burger that's going to be turning heads because it helps defuse the "veto factor" that has likely held Olive Garden's performance back in the past. That's how the restaurant industry thinks of the problem of having just one person in a group who won't be able to find anything on your menu he wants. If someone in your dining party just isn't in the mood for Italian, it's hard for Olive Garden to win your business that night. "I'm just not feeling Italian right now," your friend might say. "Well, you can always have a burger," you counter. "It even comes with fries." Veto problem, sorted. Cracking Red Lobster's Shell Red Lobster may carry an even bigger "veto factor" burden given the nature of seafood and finicky diners, but it won't have to follow Olive Garden to Burger-ville. It's already there. Red Lobster already offers a traditional wood-grilled burger. In fact, it offers plenty of landlubber choices including steaks, chicken sandwiches, and chicken-topped pastas. It's problem is getting people through its doors to try them. Red Lobster overhauled its menu late last year, adding to its offerings items like pork chops, parmesan-crusted chicken served over corkscrew pasta, and even roasted veggie skewers. Unfortunately it's not working. Red Lobster performed even worse than Olive Garden during the summer quarter. It apparently needs more than a broader menu. At the very least, Red Lobster could be doing a better job of letting potential diners know that it's about more than just the signature lobster. "Sea Food Differently," is the chain's current slogan. A few years ago it used to be "Red Lobster for the seafood lover in you." One would think that with the word "lobster" in your name, you wouldn't have to play up the seafood quite so hard in your marketing, but that hasn't stopped the chain from pumping its maritime theme and aggressively promoting its endless shrimp campaigns. This strategy could be a mistake, but it also isn't helping that we're in the worst of times for the table service dining industry. Industry tracker NPD Group has been reporting negative sales for the casual dining market dating all the way back to 2008. The streak ended with a merely flat showing this summer, but it's still a bad moment to be a weak player in a weak eatery segment. It's time to work on the marketing. 
AFP/Getty Images TVs stand out as one of the premiere, big-ticket items of Black Friday. Even Kohl's (KSS), a store known for its clothing (not electronics), will have a few in stock that day, in an attempt to lure in a few extra bargain hunters. With so many different stores running specials, and all the different models on sale, there are literally dozens of different Black Friday TVs to choose from. While there are plenty of great deals available, a few stand out as being particularly noteworthy. Head to Walmart for the All-Around Cheapest Flat-Screen TV Walmart (WMT) will be selling a 32-inch LED Funai for just $98, making it one of the very cheapest TVs on sale this year. Discriminating buyers, however, should likely stay away -- Funai isn't in the same league as Sony (SNE) or Panasonic (PCRFY) when it comes to picture quality, and this particular set is just 720p (in contrast to full-HD 1080p). If you've never heard of Funai, the company generally sells its TVs under the Sylvania and Magnavox brands, two budget names not exactly known for their quality. Nevertheless, $98 for a 32-inch LED is hard (perhaps impossible) to beat. Shoppers looking for the cheapest flat-screen they can get their hands on should plan to be at Walmart Thanksgiving night. For a Great Deal on a Quality Samsung, Hit h.h. gregg At h.h. gregg (HGG), they'll also be offering a 32-inch LED, but unlike Walmart's Funai deal, this is on a model known for its quality. The set, Samsung's UN32EH5300, was declared one of the best 32-inch LCD TVs you can buy by LCD TV Buying Guide for 2012. It sports full-HD 1080p, and comes equipped with Samsung's smart TV suite -- owners can access digital content from sites like Netflix (NFLX) and Youtube. h.h. gregg will sell the TV for $299.99, what it claims is a 33 percent discount. Right now, Amazon (AMZN) is charging about $330 for the TV as part of its "Countdown to Black Friday" sale, making the h.h. gregg discount closer to 10 percent. (Oops. Just checked back on Amazon and now the TV is selling at $297.99 at Amazon. Lesson learned: Up until the moment you hand over your credit card, keep comparison shopping.) This Set Comes with a Sound Bar In terms of discounts, BJ's Wholesale has one of the best: It will sell an LG 47-inch LED for $580, about 30 percent off its regular price. Even Amazon can't come close -- it charges nearly $70 more. LG is considered a respectable TV brand, but the set in question (the 47LN5790) is a budget model that hasn't been reviewed by the big websites. Still, it offers 1080p and smart TV functionality. Most interesting, it comes packaged with a separate sound bar, an accessory that's practically become a necessity in the age of paper-thin TVs with low-quality speakers. Even entry-level sound bars retail for about $100. So factor that into your buying decision. The Best Deal on the Biggest Screen? In addition to selling the cheapest TV overall, Walmart will also offer the cheapest large TV -- a massive 70-inch, 1080p Vizio for $998. Like the Samsung and LG sets, it also includes smart TV functionality, giving owners access to Netflix and Hulu without having to attach an external media player. Walmart claims buyers will be saving $700 on the set; indeed, Amazon charges about $1,700 for the TV. In terms of reviews, the reception has only been lukewarm -- PC Mag gave it just 3.5 stars out of 5, lamenting its modest black levels. Nevertheless, shoppers looking for an enormous TV at a rock-bottom price will be hard pressed to find a better deal. Shopping for a Screen, From Your Screen Those looking to stay home on Friday, but who still want to buy a TV on the cheap, should browse over to Dell's website. In addition to its own PCs, Dell will be selling a 50-inch, 1080p Sharp for just $498. Normally, that TV retails for closer to $700. Unfortunately, it's just a mid-range set, with a 60Hz refresh rate, making it less than ideal for watching sports or playing video games. But of the deals that have been announced, it's one of the best ones among online retailers. Online shoppers, however, should keep their eyes on Amazon. Though it doesn't preannounce its specials, come Friday, it's likely to have a competitive slate of products -- including TVs -- on sale. Buying a TV on Black Friday Of course, these are just a small sampling of the deals available; other retailers, including Sears (SHLD), Best Buy (BBY), and Target (TGT), have an extensive lineup of TVs on sale. Ultimately, it comes down to personal preference -- are you aiming for the largest TV possible? The cheapest price? Are you willing to pay a little more for a set that's higher quality? Perhaps most important, with retailers' limited inventory, will you be lucky enough to get one?