Bank of America reported results that were better than expected for the first quarter despite a drop in revenue and one-time accounting charges. Bank of America’s net income dropped to $653 million, or $0.03 a share, from $2 billion, or $0.17 a share a year ago. Revenue fell 20 percent to $22.5 billion. Excluding one time charges, the company’s revenue decreased 2.5% to $27.3 billion, while its operating profit increased 38% to $3.6 billion.
The bank’s operating income was $0.31 a share. This beat analysts’ estimates of $0.12 a share. The global markets unit reported a profit of $798 million, compared with a loss of $768 million in the fourth quarter. Revenue in the division more than doubled from the fourth quarter but was less than the reported amount for the first quarter last year.
Lower consumer credit losses and increased strength on Wall Street offset the weakness displayed in the company’s mortgage business. Fewer commercial loans soured and consumer auto loans and credit cards defaulted at a slower rate. Provisions for credit losses fell to $2.4 billion, from $3.8 billion in the first quarter of 2011.
Brian T. Moynihan, the bank’s chief executive, said, “Our strategy is paying off. With the economy steadily improving and because of the work we have done to strengthen and simplify our company, we saw improved profitability in all of our businesses this quarter compared to the fourth quarter of last year.” Mr. Moynihan has focused on building capital levels and restoring profitability during his tenure at the bank.
An analyst at Oppenheimer, Chris Kotowski, said it was “all in all a very credible quarter” but warned that mortgage liabilities remain a worry for the bank. Huge mortgage-related losses took a toll on earnings last year. It will take some time to see whether mortgage-related losses will have a similar effect on earnings this year.
