Wells Fargo beats by $0.14, reports revs in-line
- Reports Q3 (Sep) earnings of $1.42 per share, excluding non-recurring items, $0.14 better than the FactSet Consensus of $1.28; revenues fell 2.4% year/year to $20.37 bln vs the $20.4 bln FactSet Consensus.
- Net interest income decreased 11%, due to higher funding costs reflecting customer migration to higher yielding deposit products, and deposit mix and pricing changes, including increased pricing on sweep deposits in advisory brokerage accounts, as well as lower loan balances, partially offset by higher yields on earning assets.
- Provision for credit losses in third quarter 2024 included a modest decrease in the allowance for credit losses, reflecting lower allowances across most loan portfolios, partially offset by a higher allowance for credit card loans driven by an increase in balances Chief Executive Officer Charlie Scharf commented, "We had solid results in the third quarter with both net income and diluted earnings per share up from the second quarter. Our earnings profile is very different than it was five years ago as we have been making strategic investments in many of our businesses and de-emphasizing or selling others. Our revenue sources are more diverse and fee-based revenue grew 16% during the first nine months of the year, largely offsetting net interest income headwinds. We have maintained strong credit discipline and driven significant operating efficiencies in the company while investing heavily to build a risk and control environment appropriate for a bank of our size and complexity. While we believe there are significant benefits still to come from our investments, it is gratifying to see our actions having an impact on our business metrics and financial results."
- Guidance: Q4 net interest income is roughly expected to be in line with Q3; reaffirms FY24 non-interest expense guidance of $54 bln.