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The earnings season kicked off with 20 companies of the S&P 500 financial sector reporting their second-quarter earnings this week.
In the second quarter, the Financial Select Sector SPDR Fund ETF (NYSEARCA:XLF) advanced 5.27% compared to a 10.15% rise in the broader markets. Quarter-to-date, XLF has inched up by 5.55% while the S&P 500 index gained 11.79%.
Earnings recap
Out of the 20 companies that have posted their results, 19 have seen earnings beat, with just one lagging behind. On the revenue side, 16 companies beat analysts’ consensus while four trailed estimates.
Bank of America shares inched up after it reaffirmed guidance for Q4 net interest income. The company’s earnings recorded an EPS of $0.89 while revenue came in at $26.46B slightly missing consensus.
Banking bigwigs including JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS), beat earnings.
JPMorgan Q2 earnings and revenue exceeded the average analyst estimate, driven by strong year-over-year growth in the Markets division, especially in equities and in Asset & Wealth Management. However, net interest income came in slightly below the consensus estimate.
Morgan Stanley reported stronger-than-expected Q2 earnings and revenue supported by solid net interest income and a rise in wealth management revenue both sequentially and year-over-year. However, its provision for credit losses came in higher than what analysts had anticipated.
Citigroup raised its full-year net interest income outlook and now expects 2025 revenue to reach the upper end of its prior guidance, following Q2 earnings and revenue that topped expectations.
Goldman Sachs’ Q2 earnings and revenue beat were driven by a sharp rise in net interest income along with strong performance in investment banking fees and equities revenue.
At the industry level, 16 banks, one capital market, one consumer finance company and two insurance companies reported earnings this week.
Notable financial companies reporting next week include Blackstone (NYSE:BX), Synchrony Financial (NYSE:SYF), Fiserv (NYSE:FI) and Nasdaq (NASDAQ:NDAQ).