Wells Fargo Q1 Profit Beats Estimates

Wells Fargo & Co. WFC reported stronger-than-expected earnings for its first quarter on Tuesday. The San Francisco, California-based bank posted quarterly net income of $5.8 billion, or $1.04 per share, compared to $5.89 billion, or $1.05 per share, in the year-ago period. Its revenue climbed 3.2 percent to $21.28 billion. However, analysts were estimating a profit of $0.98 per share on revenue of $21.24 billion. Costs gained 5 percent to $12.51 billion versus $11.95 billion. At the end of the first quarter, total loans rose 4 percent to $861.23 billion, versus $826.44 billion in the year-ago period. Commercial and industrial loans climbed 13 percent to $271.1 billion, compared to $239.23 billion. Average total deposits gained 9 percent y/y to $1.2 trillion. Nonperforming assets slipped by $618 million versus the fourth quarter to $14.8 billion. Community Banking's revenue climbed 2 percent y/y in the quarter, while Wholesale Banking revenue rose 6 percent. Wealth, Brokerage and Retirement revenue surged 8 percent y/y in the latest quarter. Return on assets came in at 1.38 percent in the quarter, while return on equity came in at 13.17 percent. Net interest margin shrank to 2.95%, versus 3.20% in the year-ago quarter. The average estimate among 60 Estimize users was for earnings of $0.99 per share and revenue of $21.25 billion. "Our solid first quarter results again reflected the benefit of our diversified business model and the continued focus of our 266,000 team members on serving the needs of consumer and business customers," said Chairman and CEO John Stumpf. "We continued to strengthen our customer relationships in the quarter, as reflected in strong growth in deposits and primary checking customers." Wells Fargo shares declined 0.44 percent to $54.35 in pre-market trading.