Update 22 April
Daybrook and Lucky Star Drive Oceana’s (OCE) Profit Jump
Oceana (OCE) announced positive news about their earnings for the first half of 2024. Investors responded well, causing the stock price to jump nearly 6%. The company had previously said earnings would be significantly higher than last year, and this update provided more specific details (earnings up 89% to 99%). The good results were driven by Daybrook selling more fishmeal and fish oil at record prices, and Lucky Star selling more canned food. Sales of wild-caught seafood were lower, however, which limited the overall increase in earnings.
Bank of America Corp. (NYSE: BAC)
Bank of America’s first-quarter earnings were a mixed bag. The bank surpassed analyst expectations, boasting an adjusted profit per share of 83 cents, exceeding the predicted 76 cents. Revenue also came in strong at $25.98 billion, slightly higher than the anticipated $25.46 billion. However, there were underlying factors that caused some concern.
Profitability dipped by 18% year-over-year to $6.67 billion, though this figure is slightly skewed by a one-time $700 million expense. On a positive note, interest income, a key metric reflecting the bank’s earnings from loans and investments, reached $14.19 billion, exceeding expectations. However, analysts remain cautious about whether this positive trend will hold.
Another area of concern was stagnant loan growth. While deposits showed a slight increase to $1.95 trillion, loans remained flat at $1.05 trillion. This suggests that borrowing activity isn’t picking up as much as some might have hoped.
The bank’s outlook for the future is also a mixed bag. While investment banking revenue surged 35% to $1.57 billion, exceeding expectations by a significant margin, a key source of income, Net Interest Income (NII), is likely to decline in the next quarter to around $14 billion. This decline is likely due to rising interest rates, which can have a negative impact on banks.
The stock price decline reflects this uncertainty. Despite exceeding expectations, Bank of America’s share price fell more than 3%. This is likely due to the broader market trend of rising bond yields, which can negatively affect the value of banks’ holdings.
Blackstone Inc (NYSE: BX)
Blackstone, the world’s biggest private equity firm, delivered a first quarter with mixed results. Overall earnings saw a modest increase, but the story behind the numbers is more nuanced.
The money Blackstone uses to pay dividends, called distributable earnings, edged up slightly year-over-year to $1.27 billion. This translates to earnings per share that beat analyst predictions. The good news continues with fee income, the money Blackstone makes from managing client investments. This area boomed, growing 12% thanks to successful fundraising efforts. This helped keep Blackstone’s assets under management above the impressive $1 trillion mark.
However, there were some downsides. Profits from selling off investments, a major source of income for Blackstone, fell by 25%. This is because they sold fewer assets compared to last year. Additionally, while Blackstone’s various investment funds had some bright spots, like hedge funds performing well, the overall performance fell short of the broader market’s gains.
Looking at a different financial metric, Blackstone’s net income under accounting principles surged. This jump is primarily due to the growth in fees and investment income. The company also impressed by raising a significant amount of new capital and boasting a large pool of unspent money. They even declared a healthy dividend for shareholders.
Sources: Bloomberg; CNBC;
Piece written by Trive Sales Trader, Kealeboga Molefe
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