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Nov 30, 2017

CIBC shrugs off short call, easily beats Q4 profit estimates


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Canadian Imperial Bank of Commerce (CM.TO) blew past estimates in its fourth quarter as U.S. profits surged thanks to the takeover of PrivateBancorp earlier this year.

CIBC’s net income in the three months ending Oct. 31 was $1.16 billion, compared with $931 million a year earlier.

On an adjusted basis, CIBC earned $2.81 per share. Analysts, on average, expected $2.59.

Profit in the bank’s U.S. division rose to $107 million from $23 million a year earlier.

The lion’s share of CIBC’s profit came from its bread-and-butter Canadian division, where adjusted earnings rose by $63 million year-over-year to $623 million.

“In 2017, CIBC delivered record net income driven by strong performance across all of our strategic business units, as well as our acquisition of The PrivateBank,” said CEO Victor Dodig in a press release Thursday. “Looking forward, we are well positioned to continue to deliver sustainable growth to our shareholders.”

The results came hot on the heels of a call against the bank. CIBC landed in a short seller’s crosshairs earlier this week, when Atlanta-based PAA Research slapped a $76 price target on the bank’s stock, which closed Wednesday at $114.80.

“Given the negative sentiment on the name (including short sellers) and the strong performance against expectations, we would expect to see solid outperformance on CIBC [Thursday] as the market begins to rerate the stock,” wrote Barclays Analyst John Aiken in a report to clients.



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