Get ready for earnings mayhem. The nation's largest banks -- Goldman Sachs ( GS), JPMorgan Chase ( JPM), Bank of America ( BAC) and Citigroup ( C) -- are all scheduled to report second-quarter results this week and no one agrees on what to expect. Consider the range of analyst expectations for Citi's second-quarter loss from 76 cents to 5 cents per share, or the estimates for JPMorgan to produce either a loss of 23 cents or a profit of 27 cents a share. "Weak and messy" is the forecast from JPMorgan analyst Vivek Juneja. "Pretty weak and dismal" predicts Larry Rosenthal, founder of Financial Planning Services. I don't blame the analysts, though. All this government bailout business and subsequent shift in the norms will result in a barrage of confusing and incomparable earnings statements that will attempt to show improvement of some kind - any kind. Citi's good bank vs bad bank breakdown should keep everyone confused. Then there are all of the capital increases stemming from the government's stress tests, stock conversions and accounting changes that -- on top of the bailout-related dividends and repayments -- will add to the free for all. Citi, BofA and Wells Fargo ( WFC) are among those that are still burdened by the Troubled Asset Relief Program. Others, like JPMorgan, US Bancorp ( USB), BB&T ( BBT) have repaid the government.
Even for those that have repaid, there is still the issue of all those pesky warrants associated with the preferred shares given to the Treasury in exchange for bailout funds. JPMorgan, Goldman Sachs, Morgan Stanley ( MS), US Bancorp, BB&T and others are still haggling with the government over the fair value of those securities. All in all, investors will have a lot of information to sift through and it will be a challenge to compare and contrast the results to see which banks are better off. The earnings releases will all tout different metrics to put the best foot forward. Don't expect consistency. It's every bank for itself in this climate - the rules of engagement have changed.