Earnings season for the financial sector is well underway with about a half dozen firms already reporting results that all beat expectations, including Wells Fargo, Charles Schwab and JPMorgan.
Bank of America Merrill Lynch will release its second-quarter figures on Wednesday, while Morgan Stanley will do so on Thursday.
“Quarterly earnings almost always beat quarter-end consensus estimates [and] this quarter will likely be the 41st in a row to do that — so we expect a slight year-over-year that would continue the stretch of consecutive quarterly earnings gains since the 2016 earnings recession,” said LPL Financial Chief Investment Strategist John Lynch, in a research note Tuesday. “Nearly 60 companies will report this week (July 15–19).”
Next week, TD Ameritrade (Monday), Ameriprise Financial (Tuesday), LPL (Wednesday) and Raymond James (Thursday) will share their financial reports for the period ending June 30.
Here’s what some of the largest broker-dealers have reported so far this week:
The bank — still operating without a permanent CEO — had a 19% jump in net income to $6.2 billion, benefiting from a gain on the sale of its Pick-a-Pay loans. Earnings improved about 33% to $1.30 per share, but revenue was flat at $21.6 billion.
As for the wealth operations, total assets under management declined 1% to $1.9 trillion. The unit had a 35% jump in net income, though, to $602 million.
The firm lost 3% of its advisors vs. Q2’18. It now has 13,799 — down 29 from the prior quarter, 427 from last year and 1,287 from Sept. 30, 2016 (when news of its fake-accounts scandal spread).
“Advisor headcount at [Wells Fargo Advisors] stabilized as we had our best recruiting quarter since 2016 in terms of both the number of hires and the associated production,” according to a statement.
Fees and commissions, or productivity, of veteran recruits from rivals rose 84% year to date, the group says, vs. the first half of 2018. “Advisor attrition has dropped, our pipelines are robust, and the recruiting activity levels of our local managers are very high,” it added.
As for the lower number of reps, WFA points to the aging workforce and ongoing retirement as an important factor.