PNC Financial Services Group Inc. (NYSE: PNC) reported lower-than-expected 2016 first quarter results prior to Thursday`s market trading. Opening price of the Pittsburgh-based bank decreased 2.47% to $83 per share following the announcement.
PNC reported a 1.8 percent year over year drop in revenue to $3.67 billion, which lagged Zacks consensus estimate of $3.77 billion and Thomson Reuters consensus estimate at $3.75 billion. The quarterly earnings per share also fell 4 percent to $1.68 from $1.75 in the same period last year, missing Thomson Reuters consensus estimate of $1.70.
This is PNC`s first lower-than-expected results after four sequential earnings surprise history. The company surpassed the Zacks Consensus Estimate by an average of 4.8% in the prior four quarters. Results of the decrease were primarily affected by lower non-interest income due to weakness in equity markets and reduced capital markets activity. “PNC had solid first quarter earnings that were impacted by weaker equity markets and related fees, and continued deterioration in energy related credits,” said William S. Demchak, PNC’s chairman and chief executive, "We lowered expenses, maintained a strong balance sheet and continued to return capital to shareholders. We also saw good underlying trends in our businesses to start the year, and we expect that momentum to continue in 2016.”
Other retail banks faced similar problems with PNC. Wells Fargo & Co. reported the 5.2 percent decrease in net income. The first-quarter profit of Bank of America even plummeted 13 percent percent from a year ago. All these banks` earnings were narrowed by troubled loans in the energy industry.