Earnings Reports

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Wells Fargo $WFC reported worse than expected fourth quarter earnings before the bell on Friday with JPMorgan $JPM and PNC Financial $PNC both beating. Analysts are watching commentary on the bank's seemingly endless scandals and their future rebrand. ATM classic

Wells Fargo Account Scandal brought a new meaning to Convenience cash, when will their brand recover?

Analysts expected more of the same with the fake bank account scandal still overhanging and also softer trading profits and interest spread gains. Thats what they got, more dissappointment.

Earnings:  EPS $1.16 beat expected $1.04 BUT it was the quality of those earnings. Revenue of $22.05 billion was less than the $22.427 expected.

Reaction: Wells Fargo $WFC (NYSE) PreMarket $62.81 -0.20 - 0.32%

Highlights

  • Wells Fargo booked a $3.35 billion after-tax benefit on the tax plan
  • $WFC logged a $3.25 billion pretax charge for litigation expenses.
  • Total loan balance edged up 0.5% from the prior quarter to $956.8 billion, after three straight sequential declines.
  • Community banking revenue rose 3% to $12 billion.
  • Wholesale banking revenue fell 0.8% to $7.09 billion.
  • Wealth and investment management revenue rose 5.7% to $4.3 billion.

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, Alphastreet

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