Falling revenue did not prevent S&P 500 (NYSE:SPY) component Wells Fargo & Co. (NYSE:WFC) from reporting a profit boost in the second quarter. Wells Fargo provides financial services in mainly wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance and commercial finance.
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Wells Fargo & Co. Earnings Cheat Sheet
Results: Net income for the banks-major regional rose to $4.62 billion (82 cents per share) vs. $3.95 billion (70 cents per share) in the same quarter a year earlier. This marks a rise of 17.1% from the year-earlier quarter.
Revenue: Fell 3.6% to $21.29 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Wells Fargo & Co. beat the mean analyst estimate of 81 cents per share. Analysts were expecting revenue of $21.36 billion.
Quoting Management: “Wells Fargo’s strong financial results this quarter again reflect the benefit of our diversified business model.” said Chairman and CEO John Stumpf. “While the economic recovery remains uneven, we continued to meet our customers’ financial needs and benefited from signs of stabilization in the housing market. Our accomplishments reflect our continued focus on key Wells Fargo fundamentals: the way our team members work together to serve customers, and the way we manage risk. The foundation of our business is putting the customer at the center of all we do. Because of that focus, our customers entrusted more of their business with us-we had record quarterly mortgage applications, increases in lending to consumers and businesses, and continued growth in deposits and cross-sell.”
The company has now seen its net income increase for three consecutive quarters. In the first quarter, net income rose 13% and in the fourth quarter of the last fiscal year, the figure rose 20.3%.
For three consecutive quarters, the company has topped analyst estimates. It beat the mark by 2 cents in the first quarter and by one cent in the fourth quarter of the last fiscal year.
Revenue fell last quarter after increasing in the previous quarter. Revenue rose 3.9% to $23 billion in the first quarter from the year earlier.
Looking Forward: Expectations for the third quarter have not changed from 84 cents. For the fiscal year, the average estimate has moved up from $3.24 a share to $3.28 over the last ninety days.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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