Apr. 23, 2009 (Baystreet.ca) --
Major banker PNC Financial Services (PNC) reported first quarter earnings that easily beat Wall Street's view, aided by its January acquisition of National City Bank.
The Pittsburgh-based bank reported fiscal first quarter net income of $460 million, or $1.03 per share, up 22% from $377 million, or $1.09 per share, in the year-ago period. The latest quarter's EPS numbers fell from last year because PNC now has several more shares outstanding, a result of its January 2009 acquisition of National City for $3.9 billion.
Revenue for the quarter more than doubled to $3.87 billion. On average, Wall Street analysts expected net income of 42 cents per share on revenue of $3.5 billion.
Earnings Highlights
profit from corporate and institutional banking rose nearly 15-fold to $374 million profit from retail banking fell 59% to $56 million profit from asset management rose 3% to $38 million PNC lost $197 million resulting from its 1/3 stake in BlackRock (BLK) nonperforming assets rose 60% to $3.47 billion realized $400 million in cost savings due to National City merger
The company also said it plans to cut 5,800 jobs as part of further cost-cutting plans. PNC shares rose $1.44, or +3.7%, in morning trading Thursday.
The Bottom Line
We had removed shares of PNC from our “Recommended” list back on Oct.9, when the stock traded at $67.75. The company will now have a 1.05% dividend yield, based on the lower dividend payout and Friday’s closing stock price of $38.06. The stock has technical support in the $28-32 price range. If the shares can continue to rebound, we see overhead resistance in the $44-48 price area. We would remain on the sidelines for now.
PNC Financial Services (PNC) is not recommended at this time, holding a Dividend.com DARS Rating of 3.0 out of 5 stars.
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Newstex ID: BAY-1002-34357836