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Market Update

Bank of America Earnings on Tap

Will the new-year earnings ring in a change of direction for B of A?

Apr 14, 2011

Bank of America (BAC) is scheduled to post first-quarter earnings per share before the bell Friday of $0.27, compared with $0.28 in the same quarter last year.

While Bank of America posted a full-year net loss in the previous fiscal year, a strong performance may set the tone for the firm returning to the black this year.

Investors will analyze the results on key metrics such as loan growth, margins on credit cards and mortgages, and trading revenue, but will likely key in on how much of the profitability boost came from a reduction in loan-loss reserves in the face of improving macroeconomic conditions.

Though Morningstar analyst Jaime Peters thinks Bank of America is now back on a "sustainable path towards consistent profitability," she thinks it may lag peers for years. Bank of America shares, currently trading around $13.20, are somewhat undervalued compared with her fair value estimate of $18.

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