There were some big shifts in the ranked performance of the largest broker-dealers in Q1'20 vs. Q4'19, as the COVID-19 pandemic prompted banks to increase their loan loss provisions.
WORST: 13th place. Earnings $653 million,
DOWN 89% | EPS $0.01, DOWN from $1.20 | Employee advisor headcount 13,450, DOWN 378. |
Wells Fargo branch in New York (Photo: Bloomberg)
12th place. Earnings $2.87 billion,
DOWN 69% | EPS $0.78, DOWN 71% | Wealth advisor headcount 2,878, UP 1. |
JPMorgan Sign on a building in NYC. (Photo: AP)
11th place. Earnings $1.21 billion,
DOWN 49% | EPS $3.11, DOWN 46% | Wealth management revenues (including United Capital) $1.2 billion, UP 18%. |
10th place. Earnings $2.52 billion,
DOWN 46% | EPS $1.05, DOWN 44% | Private bank revenues $949 million, UP 8%. |
9th place. Earnings $4.01 billion,
DOWN 45% | EPS $0.40, DOWN 43% | Merrill headcount 17,646, UP 111. |
Bank of America building (Photo: AP)
BANK OF AMERICA
8th place. Earnings $269 million,
DOWN 35% | EPS $1.20, DOWN 34% | Advisor headcount 8,148, UP 286. |
Raymond James CEO Paul Reilly.
7th place. Earnings $22 million,
DOWN 31% | EPS $0.32, down 24% | Advisor and associate headcount 1,316, DOWN 51. |
Waddell & Reed headquarters in Shawnee Mission, Kansas.
WADDELL and REED
6th place. Earnings $1.7 billion,
DOWN 30% | EPS $1.01, DOWN 27% | Advisor headcount 15,432, DOWN 276. |
Morgan Stanley's New York headquarters (Photo: Bloomberg)
5th place. — Earnings $81.75 million,
DOWN 16%| EPS $1.01, DOWN 12% | Advisor headcount 2,130, DOWN 31. |
Stifel CEO Ronald Kruszewski (Photo: Bloomberg)
4th place. Earnings $218.7 million,
DOWN 3.5% | EPS $1.20, down 5% | Total wealth management assets $138 billion, DOWN 1.5% |
First Republic Bank branch in New York (Photo: Bloomberg)
FIRST REPUBLIC BANK
3rd place. Earnings $156 million,
UP 0.2% | EPS $1.92, UP 7% | Advisor headcount 16,763, UP 574. |
LPL CEO Dan Arnold (Photo: LPL Financial)
2nd place. Earnings $694 million,
UP 34% | EPS $5.41, up 46% | 9,878 franchisee/employee advisors, DOWN 101. |
BEST: 1st place. Earnings $1.6 billion,
UP 40% | EPS $0.43, UP 43% | Advisor headcount-Americas 6,496, DOWN 294. |
A UBS building in New York (Photo: Bloomberg)
The majority of of U.S. companies, 95%, have reported earnings for the first three months of the year, according to the research group FactSet. So far, S&P 500 companies have reported an average earnings decline of -14.6% for the first quarter.
“If -14.6% is the actual decline for the quarter, it will mark the largest year-over-year decline in earnings reported by the index since Q3 2009 (-15.7%),” FactSet analyst John Butters said in a report last week.
The financial industry is one of five sectors with a year-over-year decline in earnings, along with consumer discretionary, energy, industrials and materials.
The financial sector had an aggregate negative difference between actual earnings and estimated earnings of about 20%.
“Within this sector, Capital One Financial (-$3.02 vs. $1.88), Comerica (-$0.46 vs. $0.98), Discover Financial Services (-$0.25 vs. $0.72) and Wells Fargo ($0.01 vs. $0.37) reported the largest negative EPS surprises,” Butters explained.
Yet, 51% of financial companies reported earnings above estimates, FactSet says, and the difference between actual revenue and estimated revenue was 1% for the group.
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