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Falling revenue did not prevent S&P 500 (NYSE:SPY) component Wells Fargo & Co. (NYSE:WFC) from reporting a profit boost in the third 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 $4.9 billion (88 cents per share) vs. $4.05 billion (72 cents per share) in the same quarter a year earlier. This marks a rise of 20.8% from the year-earlier quarter.
Revenue: Fell 0.3% to $21.2 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Wells Fargo & Co. beat the mean analyst estimate of 87 cents per share. Analysts were expecting revenue of $21.36 billion.
Quoting Management: “Through the efforts of our more than 265,000 team members, we’ve now achieved six consecutive quarters of record net income and EPS,” said Chairman and CEO John Stumpf. “By focusing on earning all of our customers’ business and providing outstanding service, we continued to generate growth across our diversified set of businesses. In the third quarter, core loans grew by $11.9 billion and we saw continued strength in our mortgage and deposit businesses. We remained diligent in managing costs and continued to have strong underlying credit performance as our loss mitigation efforts and the low interest rate environment helped improve affordability for our customers.”
The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 17.1% and in the first quarter, the figure rose 13%.
The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by one cent in the second quarter, by 2 cents in the first quarter, and by one cent in the fourth quarter of the last fiscal year.
A year-over-year revenue decrease last quarter snaps a streak of two consecutive quarters of revenue increases. Revenue rose 2.3% in the second quarter and 3.9% in the first quarter.
Looking Forward: The average estimate for the fourth quarter is steady at 88 cents a share. Over the past three months, the average estimate for the fiscal year has climbed from $3.27 per to share to $3.31.
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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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