FAST FIVE: Wells Reports Dismal Q4 Earnings: Huge Earnings Miss, NIM Tumbles As Expenses Soar
Wells Reports Dismal Q4 Earnings: Huge Earnings Miss, NIM Tumbles As Expenses Soar If JPMorgan was the posted child for how one should frontrun the Fed's QE4 (which JPMorgan triggered thanks to the repo market crisis it itself created by pulling liquidity from the market and investing it in risk assets) and report blowout Q4 earnings, Wells Fargo was the polar opposite.
Warren Buffett's favorite bank reported revenue and EPS which both missed estimates, with Q4 revenue sliding 5.1% to $19.9BN, below the $20.1BN estimate, while Net income of $2.9 billion and diluted EPS of $0.60 (which included the impact of $1.5 billion, or $(0.33) per share, of litigation accruals) also missed estimates of $1.10, even with the one-time adjustment.
However one defines it, the Net Income trend is hardly Wells Fargo's friend: Despite the dismal Q4 results, Wells was proud to announce it returned $9.0 billion to shareholders through common stock dividends and net share repurchases, up from $8.8 billion in 4Q18.
At the same time, net charge-offs were $769 million, up $124 million from Q3 and the net charge-off rate was 0.32%, up 5 bps.
And, not surprisingly, Wells stock is reflecting just these investor concerns as it slides nearly 4% in the premarket.