U.S. Bancorp stock rose Wednesday despite weakness in the broad equities market as the company said it would beat Wall Street profit targets for 2023, although it missed its earnings and revenue targets for the fourth quarter.
Jefferies analyst Ken Usdin said the bank’s 2023 guidance implied full-year earnings of $5.15 a share to $5.20 a share, ahead of the current analyst estimate of $5 a share compiled by FactSet.
US Bancorp stock rose 5.7%, even as the S&P 500 moved lower by 1.3% on Wednesday.
The bank completed its acquisition of Mitsubishi UFJ Financial Group for $5.5 billion in cash and 44 million shares on Dec. 1 and said the business will add 8% to 9% to its 2023 earnings per share.
Looking ahead at the first quarter, U.S. Bancorp said total revenue is estimated to be in a range of $7.1 billion to $7.3 billion, including approximately $100 million of purchase accounting accretion. Wall Street analysts currently expect revenue of $7.05 billion, according to FactSet data.
For 2023, U.S. Bancorp anticipates revenue of $29 billion to $31 billion, compared to the analyst estimate of $29 billion.
For the fourth quarter, U.S. Bancorp said its net income fell by 50% to $853 million, or 57 cents a share, from $1.58 billion, or $1.07 a share, in the year-ago quarter.
Revenue rose to $6.37 billion from $5.68 billion.
Analysts expected fourth-quarter earnings of $1.12 a share on revenue of $6.62 billion, according to FactSet data.
Oppenheimer analyst Chris Kotowski said the bank’s fourth-quarter profit included several one-time costs related to its MUFG acquisition including $399 million of balance sheet optimization impacts against revenues, $90 million of merger and integration expenses and a $791 million impact to its provision for credit losses.
Breaking out these items, U.S. Bancorp would have earned $1.26 a share, close to his estimate of $1.28 a share, Kotowski said.
Including Wednesday’s boost, U.S. Bancorp stock is up 13.3% in 2023, compared to a rise of 3.8% by the S&P 500