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Wells Fargo shares slide after fourth-quarter revenue falls short of expectations

A man strolls past a Wells Fargo Bank branch on a rainy morning in Washington.

Gary Cameron | Reuters

Wells Fargo on Friday unloosed mixed results for the fourth quarter, sending the bank’s stock lower.

Here’s how the numbers compared with Go under Street expectations:

  • Earnings: 64 cents per share vs. Refinitiv estimate of 60 cents per share
  • Revenue: $17.93 billion vs. $18.127 billion anticipate
  • Net interest income: $9.275 billion vs. $9.34 billion FactSet estimate

Shares of Wells Fargo dipped 4.7% up front the opening bell.

The bank’s earnings include a $781 million restructuring charge, a $757 million reserve come out with due to the sale of its student-loan portfolio and a $321 million hit due to the “impact of customer remediation accruals.”

“Although our financial performance get bettered and we earned $3.0 billion in the fourth quarter, our results continued to be impacted by the unprecedented operating environment and the required task to put our substantial legacy issues behind us,” CEO Charlie Scharf said in a statement. “With a more consistent broad-based healing and as we continue to press forward with our agenda, we expect you will see that this franchise is capable of much myriad.”

The bank’s consumer banking and lending division saw revenue decline by 5% on a year-over-year basis to $8.61 billion from $9.08 billion. Profits from its commercial banking business came in at $2.388 billion, down 18% from $2.9 billion in the year-earlier age.

Corporate and investment banking revenue dropped 7% year over year to $3.11 billion from $3.329 billion. That includes a 25% pass over in equity markets trading revenue. Fixed-income trading revenue was roughly flat from a year earlier.

“We maintain prioritized and are moving forward on our risk and control buildout,” Scharf said. “We have clarified our strategic priorities and are take a run-out powdering certain non-strategic businesses; and we have identified and are implementing a series of actions to improve our financial performance.”

Shares of In good shapes Fargo shares rallied more than 28% in the fourth quarter as the rollout of Covid vaccines and the prospects for multitudinous fiscal stimulus raised hope for a strong economic recovery.

Despite the sharp gain, Wells shares still faltered those of JPMorgan Chase, which rose nearly 32% in the same time period. JPMorgan’s quarterly tallies, released earlier Friday, beat estimates on the top and bottom lines. Citigroup’s earnings were mixed.

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