Bank of Montreal Shares Plunge After Missing Earnings Estimates

Shares of Bank of Montreal (BMO) tumbled over 8% in intraday trading following the release of its fiscal second-quarter results. The Canadian financial institution reported earnings that fell short of analysts’ estimates, leading to a sharp decline in its stock price.

The bank disclosed adjusted earnings per share of C$2.59 for the quarter, below the C$2.77 forecast by analysts. Revenue for the period came in at C$7.97 billion, missing expectations, while net income slipped to C$4.52 billion.

BMO’s provisions for credit losses totaled C$705 million, exceeding the C$585 million estimated by analysts. This increase in credit loss provisions added to investor concerns about the bank’s financial health.

In its U.S. operations, BMO’s net income from personal and commercial banking saw a 26% decline to C$543 million. The bank attributed this decrease to lower revenue, decreased net interest income, and a higher provision for credit losses.

As a result of the disappointing earnings report, shares of Bank of Montreal plummeted on the New York Stock Exchange, extending the stock’s losses for the year. Investors reacted negatively to the weaker performance of the U.S. segment and the higher-than-expected credit loss provisions reported by the bank.