Investors were not in a conciliatory mood after Bank of Montreal‘S (NYSE: BMO) the latest news on Tuesday. After the lender north of our border announced its latest quarterly results, investors vigorously sold the stock. When the smoke cleared, Bank of Montreal shares closed the day more than 6% lower; meanwhile S&P500 The index closed in positive territory with an increase of 0.2%.
A failure overall
In the third quarter of 2024, Bank of Montreal generated revenue of just over 8.2 billion Canadian dollars ($6.1 billion), slightly higher than the same period in 2023. Non-GAAP net income (adjusted) went in the opposite direction, amounting to 1.98 billion Canadian dollars ($1.47 billion), or 2.64 Canadian dollars ($1.96) per share. Profit in the year-ago quarter was 2.15 billion Canadian dollars ($1.59 billion).
This final result fell short of experts’ expectations. On average, analysts who followed Bank of Montreal’s stock had expected adjusted net income of 2.77 Canadian dollars ($2.05) per share.
During the quarter, the bank significantly increased its provisions for loan losses, which almost doubled from the same period last year to C$906 million (US$671 million) from C$492 million (US$365 million).
Diversification and expansion planned in the USA
In the earnings release, Bank of Montreal quoted CEO Darryl White as saying:
While the cyclical increase in credit costs resulted in provisioning above our historical range, performance was supported by operational momentum across our diversified businesses, including continued revenue growth in our Canadian retail and commercial banking businesses and stronger client activity in our market-sensitive businesses.
White added that the company continues to add new customers to its U.S. banking business.
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Eric Volkman does not own any stocks mentioned. The Motley Fool does not own any stocks mentioned. The Motley Fool has a disclosure policy.
Why Bank of Montreal stock plummeted on Tuesday was originally published by The Motley Fool
