Wells Fargo's Revenue Miss Sends Stock Down

Shares of Wells Fargo & Co WFC lost fell about 2 percent Thursday morning after the company reported its first quarter results.

Wells Fargo said it earned $1.00 per share on revenue of $22 billion; analysts were expecting the company to earn $0.97 per share on revenue of $22.3 billion.

Net income of $5.5 billion was in-line with what was reported a year ago, while book value per common share rose from $34.58 a year ago to $35.70 and tangible book value per common share rose from $28.50 to $29.79.

See Also: JPMorgan Inches Higher On Q1 Beat

CEO Tim Sloan said, "Wells Fargo continued to make meaningful progress in the first quarter in rebuilding trust with customers and other important stakeholders, while producing solid financial results. We have taken significant actions throughout the company to date and we are committed to building a better bank as we move Wells Fargo forward... While we have more work to do, I am pleased with all we have accomplished thus far. Our 273,000 team members have remained committed to helping our customers succeed financially, as reflected in improved retail customer service scores, record levels of deposits, more primary consumer checking customers, record client assets in Wealth and Investment Management, and industry-leading mortgage originations."

Here is a summary of the performance of Wells Fargo's different segments:

• Community Banking: Revenue fell from $12.614 billion a year ago to $12.093 billion while net income fell 9 percent to $3.0 billion. The company cited lower "other" income (accounting impact of net hedges, mortgage banking revenue and gains on sales of debt securities) and higher noninterest expenses.
• Wholesale Banking: Revenue rose from $6.958 billion a year ago to $7.038 billion while net income rose to 10 percent to $2.1 billion. The higher revenue was driven from an increase in net interest income from loan growth.
• Wealth and Investment Management: Revenue rose from $3.854 billion a year ago to $4.193 billion while net income 9 percent to $623 million. The company highlighted higher gains on deferred compensation plan investments, other fee income and net interest income.