If you care about money, the economy and corporate America, earnings season matters. USA TODAY’S Matt Krantz breaks it down.
Shares of Wells Fargo (WFC) fell in pre-market trading Friday after the major U.S. bank reported second-quarter earnings that fell below Wall Street’s expectations.
The San Francisco-based financial giant’s stock was down 2.7 percent at $54.51 after Wells Fargo reported earnings per share of 98 cents on net income of nearly $5.19 billion.
Financial analysts surveyed by Bloomberg News had forecast earnings per share of $1.12 and net income of $5.5 billion for the quarter that ended June 30.
Wells Fargo, the biggest U.S. mortgage lender, posted revenue of $25.03 billion in the period. Its revenue net of interest income was $21.55 billion, beating some Wall Street forecasts.
Wells Fargo shares have dropped almost 8 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased almost 5 percent. The stock has climbed almost 2 percent in the last 12 months.
The bank has tried to regain investor and Wall Street confidence after a series of financial scandals, including an episode in which Wells Fargo opened approximately 3.5 million checking accounts and other products that may not have been authorized by its banking customers.
Wells Fargo has been hit with more than $1 billion in penalties for problems with auto loans, mortgage interest rate lock extensions and other missteps.
The bank scrapped the employee sales incentives that led to the unauthorized account openings. Wells Fargo has also shaken up its board and ousted some top executives after being penalized by the Federal Reserve, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency for some of the financial issues.
The bank said second-quarter operating losses of $619 million included non-litigation expenses for previously disclosed issues, such as mortgage and auto loan violations that resulted in customers paying extra fees.
In recent months, Wells Fargo has mounted what CEO Tim Sloan on Friday characterized as the largest advertising campaign in the bank’s history. The ads cite Wells Fargo’s founding in 1852, and say the bank was “re-established” in 2018 as a newly strengthened and trustworthy lender and financial services provider.
“During the second quarter we continued to transform Wells Fargo into a better, stronger company for our customers, team members, communities and shareholders,” Sloan said in a statement issued with the earnings results.
Contributing: Kevin McCoy, USA TODAY
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