Bank of America Corporation (BAC) released its third quarter results on Tuesday, October 15. The banking institution reported better-than-expected revenue, causing shares to rise by more than 1.5% after the release of the report.

Revenue came in at $25.35 billion during the first quarter, exceeding analysts’ expectations of $25.28 billion. This was slightly higher than $25.17 billion in revenue during the same quarter last year.

“We reported solid earnings results, delivering higher average loans and our fifth consecutive quarter of sequential average deposit growth,” said Bank of America CEO, Brian Moynihan. “Net interest income increased over the second quarter, complimented by double-digit, year-over-year growth in investment banking and asset management fees, as well as sales and trading revenue. I thank our teammates for another good quarter. We continue to drive the company forward in any environment.”

The company reported net income of $6.90 billion for the quarter or $0.81 per diluted share. This is down from $7.80 billion or $0.90 per diluted share in the same quarter last year.

Bank of America’s Consumer Banking segment brought in revenue of $10.4 billion, down 1% compared to the same quarter last year. The segment added 360,000 net new consumer checking accounts, marking the second-best quarter of growth. The company’s Global Wealth and Investment Management segment garnered revenue of $5.8 billion with client balances of $4.2 trillion, up 18% from one year ago. The company’s Global Banking segment generated revenue of $5.8 billion, down 6% from revenue of $6.2 billion during the same time last year.

Bank of America Corporation (BAC) shares ended the week at $42.32, up 1% for the week.

Albertsons Reports Earnings

Albertsons Companies, Inc. (ACI) reported its second quarter earnings on Tuesday, October 15. The grocery company reported increased revenue, causing its stock to rise 1% after the release of the report.

The company reported net sales of $18.55 billion for the quarter. This is up from $18.29 billion reported at the same time last year, exceeding analysts’ estimates of $18.47 billion.

"In the second quarter of fiscal 2024, investments in our Customers for Life strategy continued to drive strong growth in our digital sales and pharmacy operations,” said Albertsons CEO, Vivek Sankaran. “We also drove strong year-over-year growth in our loyalty members and omnichannel shoppers, and accelerated growth in our Albertsons Media Collective. As we look ahead to the balance of fiscal 2024, we expect to see continuing headwinds related to investments in associate wages and benefits, an increasing mix of our pharmacy and digital businesses which carry lower margins, and an increasingly competitive backdrop. We expect these headwinds to be partially offset by ongoing and new productivity initiatives."

The company reported net income of $145.5 million or $0.25 per adjusted share. This was a decrease from the same quarter last year when Albertsons reported net income of $266.9 million or $0.46 per adjusted share.

Albertsons’ boost in net sales was driven by the company’s 2.5% increase in identical sales. Digital sales increased by 24%, and the number of loyalty members grew by 15% to 43.0 million members. Albertson’s gross margin rate was unchanged compared to the prior year, coming in at 27.6% during the quarter. The company’s selling and administrative expenses were 25.8% of net sales and other revenue relatively unchanged year-over-year.

Albertsons Companies, Inc. (ACI) shares ended the week at $19.00, up 3% for the week.

Walgreens Posts Results

Walgreens Boots Alliance, Inc. (WBA) released its fourth quarter and fiscal 2024 earnings on Tuesday, October 15. After meeting earnings estimates, the company’s stock climbed over 15% after the earnings release.

The company reported sales of $37.55 billion for the quarter, up 6% from $35.42 billion reported during the same quarter last year. Revenue came in above analysts’ expectations of $35.76 billion. Full year sales returned at $147.66 billion, up from $139.08 billion one year ago.

“Our financial results in the fiscal fourth quarter and full year 2024 reflected our disciplined execution on cost management, working capital initiatives and capex reduction,” said Walgreens CEO, Tim Wentworth. “Fiscal 2025 will be an important rebasing year as we advance our strategy to drive value creation. This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term.”

Walgreens posted a net loss of $3 billion for the quarter or $3.48 per adjusted share. This was a reduction from a net loss of $180 million or $0.21 per adjusted share one year ago. Full year net loss reached $8.64 billion, worse than a net loss of $3.08 billion reported last year.

Walgreens attributed their increased sales for the fourth quarter to growth across all major segments. The company’s U.S. Retail Pharmacy segment saw an increase in fourth quarter sales of 6.5% to $29.47 billion. The U.S. Healthcare segment reported sales of $2.11 billion, an increase of 7.1% from the $1.97 billion in sales one year ago. Internationally, the company saw an increase of 3.2% to $5.97 billion in sales, up from $5.78 billion at the same time last year. The company also announced its plan to close approximately 1,200 stores over the next three years, starting with 500 stores in fiscal 2025.

Walgreens Boots Alliance, Inc. (WBA) shares ended the week at $10.79, up 16% for the week.

The Dow started the week at 42,801 and closed at 43,276 on 10/18. The S&P 500 started the week at 5,830 and closed at 5,865. The NASDAQ started the week at 18,427 and closed at 18,490.

U.S. Treasury yields trended lower early in the week as investors responded to the latest comments from Federal Reserve officials regarding further potential interest rate cuts. Yields rose at the end of the week as the latest data on consumer spending and jobless claims showed a resilient economy.

On Thursday, the Commerce Department reported that retail sales for September rose 0.4%, without adjusting for inflation. This exceeded Wall Street’s projections of a 0.3% increase. Sales, excluding auto and gas, showed an increase of 0.5%, also surpassing analysts’ expectations of a 0.1% increase.

“Strong consumer spending in September suggests economic growth in the previous quarter was solidly above trend,” said chief economist at LPL Financial, Jeffrey Roach. "Our baseline remains that the Fed will likely cut a quarter of a percent in both November and December."

The benchmark 10-year Treasury note yield opened the holiday-shortened week of October 14 at 4.11% and traded as high as 4.10% on Thursday. The 30-year Treasury bond opened the week at 4.41% and traded as high as 4.40% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 19,000 to 241,000 for the week ending October 12. This fell below analysts’ expectations of 260,000 claims. Continuing unemployment claims increased by 9,000 to 1.87 million.

“Real wage growth and underlying demand for goods and services are overshadowing negative sentiment,” said global head of market strategy at TradeStation, David Russell. “The economy continues to accelerate thanks to the U.S. consumer, and may improve further as lower fuel prices kick in. Today’s numbers make a recession look even less likely.”

The 10-year Treasury note yield finished the week of 10/14 at 4.08%, while the 30-year Treasury note yield finished the week at 4.40%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, October 17. The survey showed the 30-year mortgage rate increased for the third straight week.

This week, the 30-year fixed rate mortgage averaged 6.44%, up from last week’s average of 6.32%. Last year at this time, the 30-year fixed rate mortgage averaged 7.63%.

The 15-year fixed rate mortgage averaged 5.63% this week, up from last week’s 5.41%. During the same week last year, the 15-year fixed rate mortgage averaged 6.92%.

“The 30-year fixed-rate mortgage increased for the third consecutive week, moving closer to 6.5%,” said Freddie Mac’s Chief Economist, Sam Khater. “In general, higher rates reflect the strength in the economy that is supportive of the housing market. But notably, as compared to a year ago, rates are more than one percentage point lower and potential homebuyers can stand to benefit, especially by shopping around for the best quote as rates can vary widely between mortgage lenders.”

Based on published national averages, the savings rate was 0.46% as of 9/16. The one-year CD averaged 1.88%.

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