BofA, Schwab Beat Expectations, Goldman Sachs Misses Estimates

Mukesh Buch
18 Apr, 2017
New York City

Boeing plans to lay off hundreds of engineers. Bank of America net surged 47%. Charles Schwab net soared 37% on 18% increase in revenues. Goldman Sachs net jumped 83%. J&J lifted sales forecast. Netflix net and revenues soared. Grainger lowered forecast.

[R]2:10 PM New York – Boeing plans to lay off hundreds of engineers. Bank of America net surged 47%. Charles Schwab net soared 37% on 18% increase in revenues. Goldman Sachs net jumped 83%. J&J lifted sales forecast. Netflix net and revenues soared. Grainger lowered forecast.[/R]

Tollbooth Index slipped 31.19 or 0.3% to 11,583.77.

Earnings Review

Boeing Co ((BA)) fell $1.61 to $177.41 after Reuter said the aerospace and defense plane-maker plans to lay off hundreds of engineers in Washington State and other locations and may eliminate more jobs later this year on weak aircraft sales and production of 747 jets.

The Boeing said the extra job cuts would include managers and executives while additional layoffs are scheduled to begin from June 23, according to the memo from vice president of engineering Commercial Airplanes, John Hamilton.

The Monday’s announcement is in addition to 245 job losses that were already scheduled for May 19 and voluntary reductions of about 1,800 engineering and technical positions so far this year.

Bank of America Corp ((BAC)) fell 8 cents to $22.73 after the financial services provider reported revenues in the first-quarter ending in March jumped 7% from a year ago to $22.2 billion.

Net income in the quarter surged 46.7% to $4.4 billion or 41 cents per diluted share from $3 billion or 28 cents in the same quarter last year.

The bank said provision for credit losses declined 16% to $835 million from $997 million and total expenses were flat at $14.8 billion and net charge-offs dropped 13% to $934 million from $1.1 billion.

Average loan balances in business segments jumped 6% to $819 billion and total average deposit balances increased 5% to $1.26 trillion and sales and trading revenue were $3.9 billion.

Mobile banking active users soared 13% to 22.2 million and total credit/debit card spending increased 5% while total client balances jumped $119 billion to approx $2.6 trillion.

Charles Schwab Corporation ((SCHW)) dropped 2.1% or 78 cents to $37.36 after the investment bank and brokerage services provider said revenues in the first-quarter ending in March surged 18% from a year ago to $2.1 billion.

Net income in the quarter soared 37% to $564 million or 39 cents per diluted share from $412 million or 29 cents in the same quarter last year.

“We ended March serving 10.3 million active brokerage accounts, 1.1 million banking accounts, and 1.5 million retirement plan participants, up 5%, 7%, and 1%, respectively,” said chief executive officer Walt Bettinger.

Net new assets across the company reached $39 billion in the quarter increased 22% and total client assets increased to $2.92 trillion, an 14% increase from a year ago period.

Goldman Sachs Group Inc ((GS)) declined 4.3% or $9.73 to $216.67 after the investment banking and brokerage services provider report revenues in the first-quarter ending in March soared 27% to $8.03 billion.

Net income in the quarter jumped 83.3% to $2.2 billion or $5.15 compared to $1.2 billion, or $2.68 per diluted share in the same period a year ago.

Goldman Sachs said as of March 31, total balance sheet assets were $894 billion total shareholders’ equity was $86.92 billion.

Johnson & Johnson ((JNJ)) slumped 3.4% or $4.22 to $121.50 after the consumer healthcare products maker said revenues in the first-quarter ending in March rose 1.6% from a year ago to $17.8 billion.

Net income in the quarter slid 0.8% to $4.4 billion or $1.61 per diluted share from $4.5 billion or $1.59 in the same quarter last year.

The healthcare products maker said domestic sales in the quarter increased 0.6% and international sales advanced 2.8%.

Johnson & Johnson lifted sales forecast in fiscal 2017 to between $75.4 billion and $76.1 billion and earnings per share in the range of $7 to $7.15.

In the quarter, J&J agreed to acquire Switzerland-based biopharmaceutical company Actelion Ltd for about $30 billion and also completed the acquisition of Abbott Medical Optics for about $4.3 billion.

Netflix, Inc ((NFLX)) dropped 2% or $3 to $144.25 after the video streaming service provider said revenues in the first-quarter ending in March jumped 34.7% from a year ago to $2.6 billion.

Net income in the quarter surged to $178.2 million or 40 cents per diluted share from $27.7 million or 6 cents in the same quarter last year.

In the quarter, Netflix added 5 million members as it expanded to 130 new markets in first-quarter of fiscal 2016 and ended the quarter with nearly 48 million subscribers outside the U.S.

The video streaming service provider said net domestic streaming subscribers increased 1.42 million and net international streaming subscribers increased to about 3.53 million, a 22% decline in international subscriber additions.

Reed Hastings chief executive officer of Netflix said next 100 million subscribers are likely to come more quickly than the first 100 million, and subscriptions range from $8 to $12 per month, with a popular option of $10 a month.

Netflix forecasted the first-half of this year, net additions of 8.15 million compared to net 8.42 million in the first-half of last year.

Netflix plans to increase programming and marketing spending in 2017 to $7 billion from $6 billion in a year ago.

Post Holdings Inc ((POST)) slumped 4% or $3.53 to $84.27 after the consumer packaged foods and cereal maker agreed to acquire the U.K.-based Weetabix Food Co. for more than £1.4 billion or $1.76 billion from China-based Bright Food Group.

The cereal maker offered more than other bidders including Associated British Foods and Barilla Group of Italy.

“We long admired Weetabix as a leader in cereal and believe it will be a fantastic strategic fit within Post,” said president and chief executive officer Rob Vitale.

United Continental Holdings Inc ((UAL)) declined 3.5% or $2.46 to $68.32 after the cargo and passenger airline services provider reported revenues in the first-quarter ending in March rose 2.7% from a year ago to $8.4 billion.

Net income in the quarter tumbled 69.3% to $96 million or 31 cents per diluted share from $313 million or 88 cents in the same quarter last year.

“From recent experiences, we need to do much better job. The incident that took place aboard Flight 3411 has been a humbling experience, and I take full responsibility,” said chief executive officer Oscar Munoz.

Dr. David Dao, the passenger of United Continental was dragged from his seat off the plane at O’Hare International Airport to make space for crew members.

W W Grainger Inc ((GWW)) plunged 10.8% or $24.15 to $198.85 after the industrial maintenance and repairing services provider stated revenues in the first-quarter ending in March increased 1% from a year ago to $2.5 billion.

Net income in the quarter dropped 6% to $174.7 million or $2.93 per diluted share from $186.7 million or $2.98 in the same quarter last year.

Grainger lowered sales forecast in the year to grow between 1% and 4% from the earlier estimated range of 2% to 6% and earnings per share in the range of $10 to $11.93 from the previous guidance of $11.30 to $12.40.