The investment bank will announce its fourth-quarter results on Friday, with analysts polled by Thomson Reuters estimating earnings of $927 billion, or 45 cents a share, on revenue of $8.012 billion. In comparison, Morgan Stanley during the fourth quarter of 2012 earned $867 million, or 45 cents a share, on revenue of $7.477 billion.
The 19% increase in fourth-quarter trading revenue (excluding accounting adjustments) reported by Bank of America (BAC) may have investors expecting a huge earnings beat for Morgan Stanley.
The broad indices all showed strong gains on Wednesday, with the S&P 500
Banks led the market higher, with the KBW Bank index (I:BKX) rising 1.4% to 70.18. All but two of the 24 index components ended with gains.
Shares of Bank of America were up 2.3% to close at $17.16, after the company reported fourth-quarter earnings applicable to common shareholders of $3.183 billion, or 29 cents a share, increasing from $2.218 billion, or 20 cents a share, in the third quarter, and $367 million, or three cents a share during the fourth quarter of 2012. The year-earlier results reflected the company's $10.3 billion mortgage putback settlement with Fannie Mae (FNMA) at the beginning of 2013.
Please see TheStreet's earnings coverage for a detailed discussion of Bank of America's results.
Goldman Sachs analyst Richard Ramsden called Bank of America's results a "very strong end to 2013... with solid revenue in key business lines and continued core expense and credit leverage." The analyst in a note to clients wrote that Bank of America's results make the consensus 2014 EPS estimate of $1.32 "look very achievable."
Next Up: Citigroup, Goldman and Regionals
Along with Citigroup (C) and Goldman Sachs (GS), several large regional banks will announce their fourth-quarter results on Thursday, including Huntington Bancshares (HBAN) of Columbus, Ohio, BB&T Corp. (BBT) of Winston-Salem, N.C., and PNC Financial Services Group (PNC) of Pittsburgh.
- Analysts polled by Thomson Reuters estimate Citi will post fourth-quarter earnings of $2.990 billion, or 95 cents a share, on revenue of $18.182 billion. This would be a significant increase from operating earnings of $2.150 billion, or 69 cents a share, excluding debit valuation (CVA) and debit valuation adjustments (DVA) during the fourth quarter of 2012. Please see TheStreet's earnings preview for more on what to expect from Citigroup.
- The consensus fourth-quarter earnings estimate for Goldman Sachs is $2.102 billion, or $4.21 cents a share, on revenue of $7.713 billion. A year earlier, Goldman earned $1.01 billion, or $1.84 a share, on revenue of $6.05 billion. Please see Antoine Gara's in-depth analysis for pointers on how to interpret Goldman's earnings report.
- Huntington Bancshares is expected by analysts to report fourth-quarter earnings of $142.8 million, or 17 cents a share, declining from $167.3 million, or 19 cents a share during the fourth quarter of 2012, when earnings were boosted by a $10 million gain on mortgage servicing rights hedge trades, as well as $14.1 million in gains from a securitization of auto loans.
- Analysts expect BB&T to post fourth-quarter earnings of $515 million, or 71 cents a share, on revenue of $2.374 billion, compared to $506 million, or 71 cents a share, a year earlier, when revenue totaled $2.533 billion.
- For PNC, the consensus fourth-quarter earnings estimate is $888 million, or $1.65 a share, on revenue of $3.834 billion. This compares to earnings of $719 million, or $1.24 a share, on revenue of $4.069 billion, during the fourth quarter of 2012.
The following chart shows the performance of the three regional banks listed above, against the KBW Bank Index and the S&P 500 since the end of 2011:
data by YCharts
-- Written by Philip van Doorn in Jupiter, Fla.