Wells Fargo & Co. WFC shares,
fell 2.5% in pre-market trading on Friday after the bank reported a fourth-quarter profit that exceeded expectations for the first time in six quarters, but revenue fell more than expected, as lower interest rates weighed on net interest income. Net income rose to $ 2.99 billion, or 64 cents per share, from $ 2.87 billion, or 60 cents per share in the same period last year. FactSet’s consensus was 59 cents earnings per share. Total revenue fell 9.7% to $ 17.93 billion, losing FactSet’s consensus of $ 18.12 billion, as all of the bank’s business segments experienced a decline in revenue. Net interest income fell 17% to $ 9.28 billion, below the FactSet consensus of $ 9.35 billion. Banking and consumer loan revenue fell 5% to $ 8.61 billion, as an 8% drop in consumer bank and small business revenue and a 7% drop in credit card revenue offset a 2% increase in residential loans. “Although our financial performance improved and we gained $ 3.0 billion in the fourth quarter, our results continued to be impacted by the unprecedented operating environment and the work required to leave behind our substantial legacy problems,” said executive Charlie Scharf. The shares rose 51.4% in the last three months through Thursday, while the SPDR Financial Select Sector ETF XLF,
advanced 26.0% and the S&P 500 SPX,
gained 9.0%.
