Wells Fargo & Co (NYSE: WFC)
Wells Fargo shares slipped $1.79, or 3.19% to $54.24 before the opening bell Friday as the bank revealed second-quarter earnings that failed to beat analyst views.
Profit and revenue fell short of expectations as the company struggled to win investor confidence following a series of financial scandals in the last year. WFC stock has lost almost 8 percent in 2018.
WFC Earnings & Outlook
The bank made a profit of $5.19 billion, or 98 cents per share, compared with $5.86 billion, or $1.08 per share, in the year-ago quarter. Analysts had projected per-share earnings of $1.12, according to Thompson Reuters data.
Total revenue also slumped to $21.6 billion compared with $22.2 billion in last year’s second quarter. In corporate and wholesale banking, earnings were down 3.9% and revenue dropped 3.8%.
Community banking segment posted earnings drop of 9.7%, while revenue of slipped 1.2% to $11.8 billion.
Wells Fargo CEO Comments
Chief Executive Officer Tim Sloan made the following remarks: “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.”
“I’m also pleased with our recent CCAR results, which demonstrates the strength of our diversified business model, our sound financial risk management practices, and our strong capital position, and enables us to return more capital to our shareholders in alignment with our goal of creating long-term shareholder value,” concluded Sloan.
Wells Fargo & Company Profile
Wells Fargo & Company is a diversified financial services firm that offers corporate, retail, and commercial banking services to businesses, individuals, and institutions. Its segments of operation are: Community Banking, Wholesale Banking, Wealth & Investment Management, and Other.
The Community Banking segment provides debit and credit cards; savings and checking accounts; and home equity, automobile, small business, mortgage, and student loans.
The Wholesale Banking division provides international trade facilities, commercial lines of credit and loans, trade financing, letters of credit, equipment leasing, asset-based lending, and foreign exchange.
It also offers treasury management, investment banking services, equity and commodity risk management, merchant payment processing, corporate trust fiduciary and agency, institutional fixed-income sales, as well as electronic/online products.
Other services offered by this segment include, land development and acquisition loans; unsecured and secured credit lines; rehabilitation loans; loans for securitization; interim financing arrangements; affordable letters of credit and housing loans; as well as mortgage brokerage and real estate services.
Its Wealth and Investment Management division provides fiduciary and investment management services, credit, private banking, financial planning, as well as trust and retirement services.
The company serves clients through approximately 13,000 ATMs and 8,300 locations; mobile and online banking; and offices in 42 countries. Wells Fargo & Company was founded in 1852 by William G. Fargo and Henry Wells. Its headquarters are based in San Francisco, California. –Reuters