BAC retreats on earnings beat

Bank of America (NYSE: BAC) on Monday beat analysts' estimate for third-quarter profit and revenue as the nation's second-largest bank set aside less than expected for loan losses.

The bank posted earnings per share of 66 cents, a 43% increase from a year earlier, exceeding the 62-cent estimate of analysts surveyed by Refinitiv. Revenue rose by a more modest 4%, to $22.8 billion, compared with the $22.67 billion estimate.

The bank's provision for credit losses decreased by $118 million to $716 million, well below the $964.2 million estimate. Meanwhile, the bank managed to cut expenses 2% to $13.1 billion, matching analysts' expectations.

The firm's net interest margin, a widely watched measure of profitability, rose four basis points to 2.42 percentage points, beating the analyst estimate by one basis point.

Profit in consumer banking, the lender's biggest division, jumped 49% to $3.1 billion on improving credit, expenses and lower taxes. That exceeded the improvements seen by wealth management, global banking and market divisions. Loans in the business rose 6% to $285 billion and deposits rose 4 percent to $688 billion.

The bank's global markets division posted profit that rose 21% to $912 million. Fixed income trading revenue came in at $2.06 billion and equities trading generated $1.01 billion, roughly matching analysts expectations for the quarter.

BAC shares lost 33 cents, or 1.1%, to $28.13, within a 52-week trading range of $25.81 to $33.05.