Wells Fargo projects record $3 billion 1Q profit
4 mins ago
NEW YORK – Wells Fargo & Co. said Thursday that it expects record first-quarter earnings of $3 billion, easily surpassing analysts' estimates and providing an encouraging sign for corporate profits.
Wells Fargo is the first bank to provide a forecast for first-quarter results, and the unexpectedly upbeat news gave an immediate boost to stock futures. Several pessimistic forecasts about potential loan losses have jolted the market in recent days, and investors have been anxious as Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. all report next week.
Wells Fargo's stock rose $3.86, or 25.9 percent, to $18.75 in electronic premarket trading, while stock futures also jumped.
San Francisco-based Wells Fargo, which has receive $25 billion in funds as part of the government's bank bailout plan, anticipates earnings after preferred dividends of about 55 cents per share. Revenue for the period ended March 31 is expected to climb 16 percent to $20 billion.
Analysts polled by Thomson Reuters forecast profit of 23 cents per share on revenue of $19 billion. Analysts' estimates typically exclude one-time items.
Wells Fargo had earned $2 billion during the first quarter last year.
Chief Financial Officer Howard Atkins says the results "reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results." The company also credited its Wachovia acquisition, which was completed Jan. 1.
Charge-offs are expected to total $3.3 billion for the first quarter, compared with a combined $6.1 billion between Wells Fargo and Wachovia during the fourth quarter. .
Wells Fargo reports quarterly results on April 22. |
