Have you been eager to see how Wells Fargo & Company WFC performed in Q3 in comparison with the market expectations? Let’s quickly scan through the key facts from this San Francisco-based money center bank’s earnings release this morning:
An Earnings Beat
Wells Fargo came out with earnings per share of $1.05, beating the Zacks Consensus Estimate by a penny. Higher revenues aided by improved net interest and non-interest income were primarily responsible for this earnings beat.
How Was the Estimate Revision Trend?
You should note that the earnings estimate for Wells Fargo was stable prior to the earnings release. The Zacks Consensus Estimate has remained unchanged over the last 7 days.
Also, Wells Fargo has a decent earnings surprise history. Before posting earnings beat in Q3, in the prior four quarters, the company delivered negative surprise in the last quarter, positive surprise in one quarter while results were in line in the remaining two quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 1.29% in the trailing four quarters.
Revenue Came In Higher Than Expected
Wells Fargo posted revenues of $21.9 billion, which significantly outpaced the Zacks Consensus Estimate of $21.5 billion. Moreover, it compared favorably with the year-ago number of $21.2 billion.
Key Stats to Note:
- Pre-tax pre-provision profit (PTPP) : $9.5 billion
- ROA (net income to average assets): 1.32%
- ROE (net income applicable to common stock to shareholders’ equity): 12.62%
What Zacks Rank Says
The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Wells Fargo. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.
How the Market Reacted So Far
Following the earnings release, Wells Fargo shares were down more than 1% in the pre-trading session. This is in line to what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have not considered the results in their favor. However, the full-session’s price movement may indicate a different picture.
Check back later for our full write up on this Wells Fargo earnings report later!
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