A woman walks past the Wells Fargo Bank in New York City, USA, on March 17, 2020.
Jeenah Moon | Reuters
Wells Fargo reported first-quarter earnings and revenue on Friday that beat Wall Street expectations despite a decline in net interest income.
Here’s how the company performed compared to Wall Street’s expectations, based on a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: $1.26 adjusted vs. $1.11 expected
- Revenue: $20.86 billion vs. expected $20.20 billion
Wells shares initially experienced a sell-off following the earnings report, but then reversed higher, trading up about 1% in premarket trading Friday morning.
Wells said its net interest income fell 8% in the quarter, reflecting the impact of higher interest rates on funding costs and a shift by customers to higher-yielding deposit products.
The company’s net income fell to $4.62 billion, or $1.20 per share, from $4.99 billion, or $1.23 per share, a year earlier. Excluding a Federal Deposit Insurance Corporation charge of $284 million, or 6 cents per share, related to the bank bankruptcies in 2023, Wells said it had profit of $1.26 per share, beating the previous year Analyst estimates of $1.11 per share.
Revenue came in at $20.86 billion, above the estimate of $20.20 billion.
“Our solid first quarter results demonstrate the progress we continue to make to improve and diversify our financial performance,” Wells CEO Charlie Scharf said in a statement.
“The investments we are making across the business contributed to higher revenues compared to the fourth quarter, as an increase in noninterest income more than offset the expected decrease in net interest income,” Scharf added.
For the most recent period, the bank set aside $938 million as a provision for loan losses. The bank said the provision includes a reduction in the allowance for loan losses attributable to commercial real estate and auto loans.
Wells’ stock is up more than 15% year-to-date, outperforming the S&P 500’s return of 9%.
The bank repurchased 112.5 million common shares, or $6.1 billion, in the first quarter.
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2024-04-12 11:40:27
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