Wells Fargo Reports Better Earnings than Wall Street Expected
Wells Fargo reported record net income for the fourth quarter of 2009 that led to earnings better than Wall Street expected.
The bank said it earned $12.3 billion in the quarter and diluted earnings per share of 8 cents despite having to repay $25 billion in bailout funds to the government.
Wall Street had been expecting the company to post a loss of a penny a share. The results sent Wells Fargo [WFC 27.98 -0.30 (-1.06%) ] shares up 2.4 percent in premarket trading and helped lift stock futures well off their morning lows.
“For the fourth quarter of 2009 and for the full year, we delivered significant value for our customers, communities, shareholders and country,” Chairman and CEO John Stumpf said in a statement.
The fourth quarter 2009 results compared with a 56-cent profit in the previous quarter and an 84-cent loss from the same time period in 2008.
Full-year earnings were reduced by 76 cents cents and quarterly earnings were cut by 47 cents for dividends and repayment of government funds through the Troubled Asset Relief Program.
Stumpf said the company’s acquisition of Wachovia in late 2008 already is translating into returns.
The net income equated to $1.75 per common share.
Wells Fargo also had record revenue of $88.7 billion, a record pre-tax pre-provision profit—a metric investors are considering key due to the TARP repayment provisions for large banks—of $39.7 billion, which is 2.1 times annual net charge-offs.
The company also said its total credit extended to consumers and businesses came in at 4711 billion.