Wells Fargo Reports Record 3rd Quarter Profits
Wells Fargo (NYSE:WFC) , the country’s largest home lender, reported record third quarter results on Friday alongside a number of other large financial institutions. The fantastic results were powered by fewer loan defaults and lower expenses. These operating efficiency helped the company overcome weakness in its mortgage lending unit. Up until recent weeks, the financial sector has been the darling of the market, Wells Fargo has moved higher by 18 some percent this year alone.
Net income applicable to shareholders rose to $5.32 billion, or 99 cents per share. To compare these results to the third quarter of last year, Wells Fargo generated $4.72 billion, or 88 cents per share, a year earlier. These results came in slightly better than Wall Street’s professionals had predicted. Analysts on average had estimated that Wells Fargo would earn 97 cents per share, according to Thomson Reuters. While net income rose, revenues did not perform as well. Revenue slipped to $20.5 billion from $21.4 billion as the company’s mortgage unit under performed. Wells Fargo made $80 billion in home loans, down from $139 billion a year earlier. Mortgage banking income fell 43 percent to $1.61 billion due to fewer loans as well as smaller profits stemming from the sale of mortgages to investors.
Other areas within the company helped to nullify the effects of the declines. Credit losses were $975 million, compared with $2.4 billion in the year ago quarter. Bank deposits were up 5% over year-over-year to $940 billion. Unfortunately for investors, the results could not put shares well into green. Shares of the company traded higher by 2 cents per share to $41.35 to finish out the session. Going into the weekend, financial analysts will be pouring into the results. Next week should be filled with a number of analyst upgrades and or downgrades. In the mean time, we will look to overcome the market moving headlines appearing from Capitol Hill this weekend.
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