BofA Profit Slides, But Beats Expectations

Updated from 9:53 a.m. EDT.

Bank of America (BAC Quote) shares surged as much as 12% after the Charlotte, N.C., bank beat Wall Street's expectations for second-quarter earnings, despite a 41% decline in profits from a year earlier.

The bank recorded profit of $3.41 billion, or 72 cents a share, in the three months ending June 30. That compares to $5.76 billion or $1.28 a share, a year earlier, but up from $1.2 billion or 23 cents in the first quarter. Revenue rose slightly to $20.3 billion.

BofA's second-quarter profit including a pre-tax merger restructuring costs of $212 million. BofA closed its purchase of Countrywide Financial on July 1.

Analysts, according to Thomson Reuters, estimated the company would earn 53 cents a share in the quarter.

BofA took a provision expense of $5.83 billion in the second quarter, related to its consumer and commercial portfolios tied to housing, including home equity, residential mortgage and homebuilders, it said.

Separately, the company said Countrywide had a second-quarter net loss of $2.33 billion, including roughly $4 billion of credit-related losses. It now expects the Countrywide deal to be accretive this year, where previously it had said the deal would be neutral to earnings in 2008.

"[T]here's a lot that's been reported about our Countrywide transaction, much of which has been exaggerated, and in some cases untrue," Lewis said on a conference call to discuss second-quarter earnings. "The essential message is that Countrywide is on track and adding to the profits of [Bank of America] as we speak."