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Wells Fargo reported b etter than expected Q1 earnings before the bell Friday. $WFC reported along with JPMorgan $JPM and PNC Financial $PNC. Consumer transactions and auto loans improved but nonperforming assets totaled $7.3 billion, well above $6.67 billion estimates..

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

$1.10 EPS on $21.00 billion forecast in revenue 

Earnings

Wells Fargo & Co. reported $1.20 per share vs $1.10 per share expected on revenue of $21.609 billion vs $21.012 billion forecast. Shares of Wells Fargo closed last Friday at $48.78. The 52-week trading range is $43.02 to $59.53.

In the conference call expect questions about the scandal-ridden company's search for a new CEO to replace Tim Sloan. Investors are hoping for signs that earnings will improve later this year. Revenue is expected to be  down at Wells Fargo. There are concerns about how low interest rates will impact their businesses witht he Fed's U turn to save the stockmarket.

Wells Fargo & Co NYSE: WFC

Market Reaction Pre-market $47.78 +0.01 (+0.21%)

Highlights

“Our financial results included continued strong credit performance and high levels of liquidity,” CFO John Shrewsberry said in a statement. “In addition, our continued de-risking of the balance sheet and consistent level of profitability have resulted in capital levels well above our regulatory minimum.”

  • Wells Fargo  credit-card transactions totaled $18.3 billion in the quarter, up 5% from a year earlier
  • Debit-card purchases increased by 6% to $86.6 billion.
  • Auto loans surged 24% to $5.4 billion. 
  • WFC it returned $6 billion to shareholders in the quarter through dividend payments and buybacks.
  • It increased its quarterly dividend to 45 cents per share, up from 43 cents in the fourth quarter of 2018.
  • Wells’ deposits fell less than expected, totaling $1.3 trillion.
  • Loans came in at $950.1 billion, roughly in line with expectations.
  • Wells Fargo’s nonperforming assets totaled $7.3 billion, well above a $6.67 billion estimate from StreetAccount.
  • The bank’s efficiency ratio was also higher than forecast, coming in at 64.4% for the quarter. A higher efficiency ratio indicates a bank is spending more money than it is making.

The company’s report follows the departure of CEO Tim Sloan on March 28. Sloan worked at Wells for 31 years. Allen Parker, Wells Fargo’s general counsel, took over as the company’s interim CEO.

Wells Fargo & Co  Q4 Earnings Recap

$1.21 EPS Beat $1.19 BUT $21.00B Missed $21.54 billion forecast in revenue 

Earnings Preview

Wells Fargo & Co. reported Q4 EPS of $1.21 on revenue of $21.0 billion with expected EPS est. $1.19 (range $1.14 to $1.33) on revenues expected of $21.54 billion, down 2.3% from the year-ago quarter.  WFC was seen with a 4Q net interest margin est. 2.95%. 4Q net charge-offs are estimated at $736.8m with a 4Q provision for credit losses estimated at $675.4m

Analysts have cut estimates for Goldman, Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley, and Wells Fargo & Co. by an average of 8.1 percent since the last quarter’s earnings reports. Goldman estimates have been slashed by 27 percent.

Wells Fargo & Co NYSE: WFC

Market Reaction Pre-market $47.95 −0.47 (-0.97%) 

Highlights

  • Community banking revenue fell 2.2% to $11.46 billion.
  • Wholesale banking revenue dropped 7% to $6.93 billion.
  • Wealth and investment management revenue dropped 8.7% to $3.96 billion.
  • Average deposits fell 3% to $1.27 trillion, and average loans dipped 1% to $946.3 billion.

"We continued to have positive business trends in the fourth quarter with primary consumer checking customers, consumer credit card active accounts, debit and credit card usage, commercial loan balances, and loan originations in auto, small business, home equity and student lending all growing compared with a year ago," CFO John Shrewsberry said.


WFC Q4 2018 earnings

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 last year barred the bank from growing until it "sufficiently improves its governance and controls."

Source: WFC, AlphaStreet

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