Wells Fargo on friday Announcement of third quarter financial results That beat Wall Street expectations, sending its stock price higher.
The bank’s report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Adjusted earnings per share: $1.52 vs expected $1.28
- income: US$20.37 billion, expected US$20.42 billion
The bank’s stock price rose more than 3% in pre-market trading after the financial report was released. Earnings were better than expected despite a sharp decline in net interest income, a key measure of bank loan income.
The San Francisco-based bank reported net interest income of $11.69 billion, down 11% from a year earlier and below the FactSet forecast of $11.9 billion. Wells said the decline was due to higher funding costs as customers switched to higher-yield deposit products.
“Our earnings profile is significantly different than it was five years ago because we have been making strategic investments in many businesses and downplaying or selling others,” Chief Executive Charles Scharf said in a statement. “Our revenue sources are more diversified, with fee income growing 16% in the first nine months of the year, which largely offset the headwinds in net interest income.”
Wells Fargo’s third-quarter net income fell to $5.11 billion (or $1.42 per share) from $5.77 billion (or $1.48 per share) in the same period last year. The company said net income included a loss on debt securities of $447 million, or 10 cents per share. Revenue fell to $20.37 billion from $20.86 billion a year ago.
The bank set aside $1.07 billion in provisions for credit losses, compared with $1.2 billion last year.
Wells Fargo repurchased $3.5 billion of common stock in the third quarter, bringing its nine-month total repurchases to more than $15 billion, a 60% increase from the same period last year.
The bank’s shares are up 17% in 2024, lagging the S&P 500.
