Banking, finance, and taxes
Why Wells Fargo Earnings Came Up Short
Published:
Last Updated:
Wells Fargo & Co. (NYSE: WFC) released its second-quarter financial results before the markets opened on Friday. The company said that it had $0.98 in earnings per share (EPS) and $21.6 billion in revenue, while consensus estimates had called for $1.12 in EPS on revenue of $21.68 billion. The same period of last year reportedly had EPS of $1.08 and $22.17 billion in revenue.
Total average loans were $944.1 billion in the second quarter, down $6.9 billion from the first quarter. Period-end loan balances were $944.3 billion, down $3.0 billion from the first quarter. Commercial loans were down $291 million sequentially, with a $2.5 billion decline in commercial real estate loans, partially offset by $1.9 billion of growth in commercial and industrial loans and a $321 million increase in lease financing loans. Consumer loans decreased $2.8 billion.
Total average deposits for second quarter 2018 were $1.3 trillion, down $25.8 billion from the prior quarter. Average consumer and small business banking deposits of $754.0 billion for second quarter 2018 were down $1.4 billion from the prior quarter.
At the end of the quarter, the company had a book value per common share of $37.41 and a tangible book value per common share of $31.47.
The bank did not offer any guidance for the coming quarter, but consensus estimates from Thomson Reuters call for $1.18 in EPS and $21.82 billion in revenue.
Tim Sloan, CEO of Wells Fargo, commented:
During the second quarter we continued to transform Wells Fargo into a better, stronger company for our customers, team members, communities and shareholders. Our progress included making further improvements to our compliance and operational risk management programs; hiring a new Chief Risk Officer; announcing innovative new products including a digital application for Merchant Services customers and our enhanced Propel Card, one of the richest no-annual-fee credit cards in the industry; launching our ‘Reestablished’ marketing effort, the largest advertising campaign in our history; announcing a new $200 billion commitment to financing sustainable businesses and projects; and continuing to move forward on our expense savings initiatives.
Shares of Wells Fargo closed Thursday at $56.03, with a consensus analyst price target of $61.57 and a 52-week range of $49.27 to $66.31. Following the announcement, the stock was down about 3% at $54.36 in early trading indications Friday.
24/7 Wall St.100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
