The Successful Investor Hotline – Friday, May 25, 2012

Article Excerpt

BANK OF MONTREAL, $54.50, Toronto symbol BMO, reported higher-than-expected earnings for its latest quarter. In the bank’s fiscal 2012 second quarter, which ended April 30, 2012, its earnings rose 27.5%, to $982 million from $770 million a year earlier. That mainly reflects the contribution from U.S. banking firm Marshall & Ilsley Corp., which Bank of Montreal bought for $4.0 billion in stock in July 2011. Because of the extra shares the bank issued to pay for Marshall & Ilsley, its earnings per share rose at a slower pace of 15.2%, to $1.44 from $1.25. These figures exclude unusual items, such as costs to integrate the new acquisition. On this basis, the latest earnings beat the consensus forecast of $1.36 a share. Revenue rose 18.8%, to $4.0 billion from $3.3 billion. Revenue at the bank’s Canadian banking business, which supplies 40% of its overall revenue, rose just 2.4% because of strong competition for new borrowers. Meanwhile, Marshall & Ilsley pushed up revenue by 114.0% at…