Market Overview

Big Banks To Kick Off New Earnings Season With Mixed Results?

Big Banks To Kick Off New Earnings Season With Mixed Results?
  • Three of the big U.S. banks help to kick off a new earnings season this week
  • Wall Street analysts expect to see earnings declines from all three of them.
  • But consensus forecasts also predict marginal top-line growth from two.

The third-quarter earnings reporting season is just getting underway this week. Financial giants Citigroup Inc (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co (NYSE: WFC) are among the first of the big players to share their results for the just ended quarter.

The consensus Wall Street forecasts call for double-digit declines in earnings from Citigroup and JPMorgan, and a more modest one from Wells Fargo (which is under scrutiny following a fraudulent accounts scandal). On the other hand, marginal growth in revenue is expected from JPMorgan and Wells Fargo, but a decline from Citigroup (where the CEO has taken advantage of weakness in the shares).

Below is a quick look at what is expected from these three reports, as well as a peek at a few other companies that also are on tap to share their quarterly results this week.


The third-quarter profit of this New York-based financial giant is predicted to have declined 19 cents per share from a year ago to $1.16, according to Wall Street analysts. The consensus of 25 Estimize respondents has earnings coming in at $1.20 per share. Note that both Wall Street and Estimize underestimated earnings in the previous two quarters.

In Friday morning's report, analysts are looking for $17.38 billion in revenue for the three months that ended in September, a little less than the $17.46 billion that Estimize is looking for. Either forecast is more than 5 percent lower than the revenue reported a year ago, and either one would represent the lowest quarterly revenue in the past two years.

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In its report before Friday's opening bell, the largest U.S. bank by assets is expected to say that in its third quarter it had earnings per share (EPS) of $1.41, according to Estimize. That would be down from a profit of $1.68 per share a year ago. The Wall Street consensus estimate is $1.38 per share, though the analysts did underestimate EPS by 5 percent or more in the previous three quarters.

Estimize underestimated revenue in the past three quarters, and this time the 58 respondents are looking for $24.09 billion. Wall Street a bit more pessimistic with its revenue forecast of $23.93 billion for the three months that ended in September. In the same period of last year, the New York-based company reported $23.54 billion in revenue.

Wells Fargo

The consensus Wall Street forecast calls for this San Francisco-based bank to post third-quarter EPS of $1.01 (down four cents from in the same period of last year) and for revenue to have risen marginally to $22.19 billion in the period. Note that Wells Fargo fell short on both the top and bottom lines back in the second quarter.

Estimize is pretty much of a like mind on EPS, with the consensus of 75 respondents pegging them at $1.02. However, revenue of $22.04 billion is expected for the three months that ended in September. Estimize also overestimated the results back in the second quarter. Wells Fargo is scheduled to share its latest results before Friday's trading session begins.

And Others

Other companies that Wall Street analysts expect to show at least some earnings growth when they report this week include Alcoa, Infosys, Marriott Vacations and Winnebago.

However, the consensus forecast calls for EPS at CSX, Delta Air Lines, Fastenal, PNC Financial and Progressive to be smaller than a year ago.

The following week, American Express, Bank of America, Goldman Sachs and Morgan Stanley, are on deck, as well as American Airlines, eBay, Halliburton, Intel, Johnson & Johnson, Microsoft, Netflix, McDonald's, Philip Morris, Walgreens and many more as the earnings crunch gets into full swing.

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At the time of this writing, the author had no position in the mentioned equities.

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