Wells Fargo posted better-than-expected growth on both its top and bottom line for the first quarter, but revenues still fell versus the year ago period, despite a jump in its so-called market sensitive income, as non-interest income declined.
A Wells Fargo ATM machine is shown in Los Angeles, California, U.S. October 19, 2018.
Wells Fargo on April 12 reported $5.5 billion of earnings attributable to common shareholders for the first quarter of 2019, in its first set of results since Tim Sloan resigned as the USA bank's chief executive. Bank of America, Citigroup and other large banks that report next week also rose.
"Numerically, for the quarter, earnings were okay but management dropped guidance, in particular, for net interest income for the full year", Morningstar analyst Eric Compton said. He was replaced by Allen Parker on an interim basis. The board is searching for a new leader outside the bank. He did not give a timetable for when a new CEO might be announced. Credit Suisse Group reissued a "hold" rating and issued a $60.00 price objective on shares of Wells Fargo & Co in a research report on Friday, January 11th. But the longer-term outlook is less certain, since the bank suspended its expense targets for 2020 after Sloan's departure. It previously forecast between a 2 percent rise and a 2 percent fall.
PNC Financial earnings matched analysts' expectations on Friday, with first quarter EPS of $2.61 on revenue of $4.29B.
Warren Buffett, whose Berkshire Hathaway Inc.is the bank's biggest shareholder, told the Financial Times earlier this month that he doesn't care whether revenue increases at Wells Fargo, he cares "about whether they grow in earnings per share over time". Its provision expense rose to $845 million from $654 million a year earlier, and the bank flagged the potential for less favorable economic conditions.
"We have more work ahead of us, and our strong leadership team is dedicated to making our Company the most customer-focused, efficient, and innovative Wells Fargo ever". Wells Fargo's gains were less pronounced, with shares ticking higher by just under 1%.
On the day of 10-04-2019 (Wednesday), the Wells Fargo & Company, (NYSE: WFC) of industry, Money Center Banks have trading rating (Loss, ↓).
Revenue fell 1.4% to $21.6 billion in the first quarter but was still more than the $21 billion average estimate of 21 analysts in a Bloomberg survey. The decrease from a year prior was due to a decline in the bank's noninterest income, which fell to United States dollars 9.3 Billion. As of now, WFC has a P/S, P/E and P/B values of 3.38, 11.06 and 1.29 respectively. As signs of a slowing USA economy mount, analysts have focused on efficiency in anticipation of slower revenue and loan growth. Average loans also decreased to Dollars 950.1 Billion, falling by USD 876 Million a year prior. With markets still riding high, investors will be closely watching the numbers as companies start reporting quarterly earnings results.