U.S. Movers: Bank of America, CBS, Citi, eBay, Rio, UnitedHealth

Mukesh Buch
17 Jan, 2013
New York City

BofA reported a sharp fall in earnings after legal charges linked to mortgage loans settlements. Citigroup reported higher earnings but a surprise legal charge of $1 billion. CBS surged after it said it is taking steps to divest its outdoor advertising unit. Ebay net surges on PayPal performance.

Bank of America Corp ((BAC)) declined 36 cents to $11.42 after the bank reported 63% decline in quarterly profit of $732 million or 3 cents a share and revenues declined 25% to $18.7 billion.

The decline in net revenues was largely the result of mortgage settlements with the government and revenues would have totaled $22.6 billion otherwise. For the year 2012, net income increased to $4.2 billion from $4.1 billion

CBS Corp ((CBS)) jumped 11% to $41.92 after the broadcasting company said it plans to divest its outdoor advertising unit.

Citigroup Inc ((C)) declined 2.7% or $1.17 to $41.32 after the global bank reported fourth quarter net income increased to $1.2 billion or 38 cents a share compared to $956 million or 31 cents a share in the quarter a year ago.

Revenues in the fixed income segment surged 58% and total revenues across the company increased 8%. However, quarterly results were affected by new legal charge of $1.03 billion or 21 cents a share. Excluding several one-time charges, Citi said it earned 69 cents a share compared to analysts’ estimate of 93 cents a share.

ebay Inc ((EBAY)) increased 3% or $1.53 to $54.43 after the online marketplace and payment processor reported better than expected earnings. In the fourth quarter, Ebay earned $751 million or 57 cents a share compared to $2 billion or $1.51 a share in the quarter in 2011.

Revenues in the quarter rose 18% from a year ago to $4 billion and matched analysts’ expectations. PayPal unit added five million new users and total users increased to 123 million and Paypal processed 700 million payments in the quarter.

In the quarter in 2011 the earnings were inflated because of one-time gain from the sale of online telecom service provider Skype to Microsoft.

Home builders jumped after the release of latest housing starts data. Toll Brothers ((TOL)) gained 2.4% or 82 cents to $35.75, D R Horton ((DHI)) gained 1.9% or 40 cents to $21.40 and PulteGroup ((PHM)) jumped 3.3% or 63 cents to $19.97.

Rio Tinto ((RIO)) declined 2% after the company eased out its chief executive Tom Albanese because of a $14 billion write-down on aluminum and coal assets he led to acquire at the peak of the market.

The write-downs are linked to two of the largest recent acquisitions by Rio, Canada based aluminum refiner Alcan and Mozambique based coal miner Riversdale Mining.

Sam Walsh, head of the company’s iron ore unit will succeed Albanese. Doug Ritchie who helped to acquire coal assets in Mozambique also was forced out.

Rio acquired Alcan for $38 billion in 2007 and paid $4 billion to purchase Riversdale Mining for $4 billion in 2011.

UnitedHealth ((UNH)) increased 22 cents to $53.87 after the largest managed-care health insurance company reported better than expected revenues and earnings. Revenues in the fourth quarter increased 11% to $28.8 billion from a year ago and reported earnings of $1.20 a share.

The company reaffirmed the previously issued 2013 outlook and estimated revenues between $123 billion and $124 billion and earnings per share in the range of $5.25 to $5.50.

In the quarter, medical costs increased 12% to $20.8 billion and total operating costs increased 12.2% to $26.7 billion. Total number of members increased to 40.9 million, an increase of 6.355 million after the acquisition of Brazil based Amil.