Shares of Wells Fargo (NYSE:WFC) are down over 6% today after the company reported mixed Q1 results.
WFC reported Q1 revenue of $17.59 billion, down 5.1% from the year-ago period and below the consensus estimates of $17.77 billion. The bank reported a Q1 EPS of 88c, topping the estimated 80c per share.
The bank reported consumer banking and lending revenue of $8.56 billion, down 1.1% YoY, though above the consensus projection of $8.31 billion. Commercial banking revenue came in at $2.33 billion, beating the expected $2.17 billion.
Wells Fargo reported corporate and investment banking revenue of $3.47 billion, down 3.7% YOY and missing the analyst estimates of $3.7 billion. Wealth and investment management revenue totaled $3.76 billion, up 6% YoY and above the analysts' projection of $3.73 billion.
"While we will likely see an increase in credit losses from historical lows, we should be a net beneficiary as we will benefit from rising rates, we have a strong capital position, and our lower expense base creates greater margins from which to invest,” said Charles W. Scharf, CEO of Wells Fargo.
Vital Knowledge analyst Adam Crisafulli commented:
“This is a modestly underwhelming report w/EPS upside driven by low-quality sources while non-interest income fell short. On the upside, NIM expanded more than anticipated and they saw solid growth in commercial loans,” Crisafulli said in a client note.
RBC analyst Gerard Cassidy saw “strong results.”
“We believe that investors will need to determine if the company’s cost-saving plans for its restructuring and the realignment of its business segments that were announced with 4Q20 results will lead it to higher profitability levels within a reasonable period of time.”
By Senad Karaahmetovic