Tags: banks | earnings | profits | estimates

WSJ: Large US Banks Seen Posting Weak Earnings in Q1

By    |   Tuesday, 08 Apr 2014 10:11 AM

Large U.S. banks are expected to announce sluggish first-quarter profits amid weak results in trading and mortgage lending, The Wall Street Journal reports.

The banks begin to report their earnings April 11, with JPMorgan Chase and Wells Fargo leading off.

Of the six biggest banks, analysts forecast JPMorgan, Citigroup, Goldman Sachs and Bank of America will report lower profits for the first quarter than a year earlier, according to The Journal. They expect Morgan Stanley's earnings to be about steady.

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Analysts have cut their estimates for all five companies in the last six weeks, The Journal notes. Wells Fargo is seen registering a slightly higher profit than last year'.

In 2013, analysts revised their earnings forecasts for the banks upward during the first quarter, helping the companies' stocks soar. The KBW Bank (stock) Index soared 35 percent last year.

But the sagging expectations this year indicate bank stocks may have lost their mojo, according to The Journal.

"The easy money has been made on U.S. banks," William Fitzpatrick, who follows financial stocks for Manulife Asset Management, tells the paper.

Meanwhile, Mark DeCambre of Quartz says banks' first-quarter woes could be a bad sign for the rest of the year.

"It's significant that banks are forecasting a tough start to the year, because typically financial institutions generate their strongest trading revenues in the first or second quarter," he writes.

"That's because large pensions, mutual funds and hedge funds make their investments at the start of the year."

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Large U.S. banks are expected to announce sluggish first-quarter profits amid weak results in trading and mortgage lending, The Wall Street Journal reports.
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2014-11-08
Tuesday, 08 Apr 2014 10:11 AM
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