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Wells Fargo missed third quarter earnings estimates before the bell on Friday. $WFC reports along with JPMorgan $JPM, Citigroup $C and PNC Financial $PNC. Earnings and the stock have been hampered by seemingly endless scandals and their future rebrand. 

wells fargo accounts

Wells Fargo & Co NYSE: WFC Missed Earnings Before Open Friday

$1.13 Missed $1.18 EPS But $21.9 billion Beat $21.81 billion forecast in revenue 

Earnings Preview

Wells Fargo & Co. reports EPS of $1.13 on revenue of $21.9 billion. third-quarter results on Friday with analysts’ consensus estimates of EPS of $1.18 in EPS on revenue of $21.81 billion. Shares of Wells Fargo have a 52-week trading range is $50.26 to $66.31.

Wells Fargo & Co NYSE: WFC

Market Reaction Pre-market $52.47 +1.03 (+2.00%) 

Highlights

  • Net interest income edged up 1% to $12.6 billion.
  • Community banking revenue rose 2.6% to $11.82 billion
  • Mortgage banking was weak
  • Wholesale banking revenue fell 2.7% to $7.3 billion.
  • Wealth management revenue  fell less than 1% to $4.23 billion.
  • Average deposits down 3% at $1.3 trillion
  • Average loans down 1% at $939.5 billion.

"We saw positive business trends in the third quarter, including growth in primary consumer checking customers, increased debit and credit card usage, and higher year-over-year loan originations in auto, small business, home equity and personal loans and lines," CFO John Shrewsberry said in a statement.

WFC Earnings Q3 18

Wells Fargo & Co NYSE: WFC Q2 Earnings Recap

Earnings

Earnings per share were 98 cents on a GAAP basis, including a 10 cent per share tax expense on revenue of $21.55 billion. Analysts had expected $1.12 and revenue of $21.677, according to Thomson Reuters. Net income of $5.19 missed, under the expected $5.47 billion.

WFC said it had state income tax charges of $481 million, related to a recent Supreme Court ruling regarding ecommerce sales (South Dakota v. Wayfair) that  states can charge taxes on purchases from out of state sellers even if the seller isn't located in that state.

  • Wells Fargo & Co NYSE: $WFC
  • Reaction July 13, 2018 Premarket $54.30 ▼ 1.73 (3.03%)

Breakdown

Wells Fargo is still trying to recover from the fake account scandal surrounding its sales practices, in which employees in its consumer banking division created fake accounts amid a high-pressure sales environment. More issues surrounding the bank's practices continue to surface. The Fed in February barred the bank from growing until it "sufficiently improves its governance and controls."

The banking sector received a boost earlier in the year after the largest U.S. banks passed Fed stress tests and were allowed to raise dividends and share buybacks. The Fed as it raise rates is helping banks' finances. Since Donald Trump won on Election Day has been a huge run higher on bank stocks. Caution hangs over the sector as auto and student loans also overhang the banking and finance sectors.   The new surge in home prices has also buoyed optimism for the mortgage business and banks profits thereto.

Source: WFC

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