Wells Fargo Shares Edge Higher on Quarterly Beat

Wells Fargo & Company (NYSE: WFC) reported its first quarter financials during Friday’s pre-market hours and topped analysts’ estimates. The better-than-expected quarter sent shares 2.1% higher after the opening bell.

For the first quarter, Wells Fargo reported earnings of USD 1.20 per share on revenue of USD 21.61 Billion. Analysts projected earnings of USD 1.09 per share on revenue of USD 21.01 Billion for the quarter.

Although Wells Fargo topped revenue estimates, the bank’s revenue still declined year-over-year from USD 21.9 Billion. The decrease from a year prior was due to a decline in the bank’s noninterest income, which fell to USD 9.3 Billion.

Average deposits fell by 3% to USD 1.3 Trillion. Average loans also decreased to USD 950.1 Billion, falling by USD 876 Million a year prior. Despite the decline, average loans fell in-line with estimates.

Non Performing assets totaled USD 7.3 Billion, above estimates of USD 6.67 Billion. The bank’s efficiency ratio was also 64.4% for the quarter, also above estimates. The higher efficiency ratio indicates that the bank is spending more money than it is making, according to CNBC.

Return on assets (ROA) was 1.26% in the quarter, while return on equity (ROE) was 12.71%. Additionally, return on average tangible common equity (ROTCE) was 15.16%.

Wells Fargo reported that credit-card transactions totaled USD 18.3 Billion the quarter, increasing by 5% year-over-year. Debit-card purchases increased as well by 6% to USD 86.6 Billion.

Chief Financial Officer John Shrewsberry said, “Wells Fargo reported USD 5.9 Billion of net income in the first quarter. Our financial results included continued strong credit performance and high levels of liquidity. 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. As a result, we returned USD 6.0 Billion to shareholders through common stock dividends and net share repurchases in the first quarter, up 49% from a year ago. Returning excess capital to shareholders remains a priority. While our expenses in the first quarter included typically higher personnel expense, we remain committed to, and are on track to achieving our 2019 expense target.”

2 Comments
  1. Ken Odeluga 6 days ago
    Reply

    Wells Fargo’s outlook for a dip in net interest income snatches defeat from the jaws of victory for the shares. $WFC beat on revenue and EPS but now says NII could fall 2%-5%, not rise 2%-5% as expected previously.

  2. Walt Newman 6 days ago
    Reply

    $WFC how can you beat on earnings and ruin a good moment by letting Shrewsbury give a worst case scenario and this tanks the stock. Dimon is upbeat and you guys are running a clown show.

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