Bank of America barely profitable; $5.3B hit
Company reports steep earnings decline, hurt by $5 billion-plus writedown on CDO-related assets.
NEW YORK (CNNMoney.com) -- Bank of America, stung by a $5.3 billion mortgage-related writedown, reported quarterly results Tuesday that fell short of Wall Street's expectations.
The Charlotte, N.C.-based company said its net income plunged 95 percent to $268 million, or 5 cents a share, from $5.26 billion, or $1.16 a share, a year earlier.
Revenue fell 31 percent to $12.67 billion from $18.48 billion in the 2006 period.
Those results were much worse than analysts had anticipated. The company was expected to report a profit of 18 cents a share on revenue of $13.24 billion.
The company also said it took a writedown totaling $5.28 billion on collateralized debt obligation-related assets to reflect weakened demand for the mortgage-related securities and recent credit agency downgrades.
"Our fourth-quarter results were severely impacted by ongoing dislocations in capital markets and the slowing economy," Bank of America Chairman and CEO Kenneth Lewis said in a statement.
"Even given that environment, we certainly are not pleased with our performance," he added.
Facing rising credit costs, particularly in the company's home equity, homebuilders and small business loan portfolios, Bank of America said it ramped up its loan loss provisions by $1.33 billion during the quarter.
Bank of America is the latest financial service company to report disappointing results in the fourth quarter. Last week, Citigroup (C, Fortune 500), Merrill Lynch (MER, Fortune 500) and Washington Mutual (WM, Fortune 500) posted steep losses as a result on the ongoing credit crisis.