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Wells Fargo reported worse than expected second quarter earnings before the bell on Friday. $WFC reported along with JPMorgan $JPM, Citigroup $C and PNC Financial $PNC. Earnings hampered by seemingly endless scandals and their future rebrand.

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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%)


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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