Wells Fargo Earns $1.01 per Share

Wells Fargo (WFC) just reported Q2 earnings of $1.01 per share which matched Wall Street’s expectations.

Wells Fargo & Co., the world’s most valuable bank, said second-quarter profit fell 2.8 percent as more energy loans soured, expenses rose and revenue from mortgage lending declined.

Net income slid to $5.6 billion, or $1.01 a share, from $5.72 billion, or $1.03, a year earlier, the San Francisco-based company said Friday in a statement. That matched the average estimate of 30 analysts surveyed by Bloomberg. Mortgage banking revenue declined 17 percent from a year earlier to $1.41 billion, falling short of the $1.8 billion estimate of Oppenheimer & Co.’s Chris Kotowski.

Revenue rose 4 percent to $22.2 billion, in line with analysts’ estimates, while expenses climbed 3.2 percent to $12.9 billion on higher employee compensation and benefits. Provisions for credit losses more than tripled to $1.07 billion from a year earlier on expanded losses in the oil and gas portfolio, the bank said.

Chief Executive Officer John Stumpf has sought to keep costs in check while amassing more deposits and expanding the bank’s loan portfolio with by purchasing assets from firms including General Electric Co. The bank has used derivatives to lock in higher income by converting floating rates into fixed payments as the Federal Reserve delays raising interest rates.

Posted by on July 15th, 2016 at 9:25 am


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