BMO profit rises but misses estimates, shares fall

Tue Dec 6, 2011 10:42am EST
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By Cameron French

DEC 6 - Bank of Montreal's (BMO.TO: Quote) quarterly profit rose 21 percent due to its acquisition of a big U.S. Midwest bank, but the result missed analysts' estimates, prompting investors to push the shares lower on Tuesday.

BMO is the first Canadian bank this quarter to miss consensus estimates, although the quarter has hardly been a stellar one for the sector due to a murky 2012 outlook and share prices that have followed the ups and downs of the European debt crisis.

Canada's fourth-largest bank earned a net C$897 million ($885 million), or C$1.34 a share, in its fiscal fourth quarter ended October 31. That compared with a year-before profit of C$739 million, or C$1.24.

Adjusted profit was C$1.27 a share, falling just short of analysts' estimates of $1.31, according to Thomson Reuters I/B/E/S.

"The capital markets were particularly soft, although that's coming after Q3, when they were particularly strong," said CIBC World Markets analyst Robert Sedran.

About one hour into trading, BMO's stock was down C$2.35, or 3.9 percent, at C$57.49 on the Toronto Stock Exchange.

Brad Smith, an analyst at Stonecap Securities, said the impact of the profit miss was exacerbated by the premium valuation BMO shares have been trading at versus their peers.

"We would expect to see meaningful price weakness," he said in a note.   Continued...