Wells Fargo profits better than expected
The bank reports that net income declined 25% but earnings beat forecasts; says merger with Wachovia on track to close by year's end.
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See all CNNMoney.com RSS FEEDS (close) Last Updated: October 15, 2008: 8:20 AM ET
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NEW YORK (CNNMoney.com) -- Wells Fargo & Co. said Wednesday its third-quarter net income declined about 24%, but the results were much better than expected.
San Francisco-based Wells Fargo (WFC, Fortune 500) reported net income of $1.64 billion, or 49 cents a share, down 25% from a profit of $2.17 billion, or 64 cents a share in the same period a year ago. Analysts expected earnings of 41 cents a share, according to Thomson Reuters.
Revenue was $10.38 billion, lower than estimates of $10.96 billion, but up 5% from $9.85 billion in the year-ago quarter.
The news comes on the heels of a better-than-expected quarterly report from JPMorgan Chase (JPM, Fortune 500). The two banks have been widely acknowledged as being among the best-run during the credit crisis and neither bank has reported a loss during the past fee quarters.
Still, both financial institutions are slated to receive part of a $125-billion emergency injection of capital from the federal government in an attempt to unfreeze frozen credit markets. Wells Fargo will get $25 billion from the Treasury Department.
Last week, Wells Fargo said it plans to complete its purchase of Wachovia Corp. (WB, Fortune 500) by the end of the fourth quarter and the company reiterated that in its earnings report.
On Sunday, the Federal Reserve approved the $11.7-billion deal but it is still subject to the approval of Wachovia shareholders. No date has been set for that vote.
Shares of Wells Fargo rose about 3% in premarket trading Wednesday and the stock is up about 14% year to date, making it one of the few big bank stocks that has gained ground this year.
First Published: October 15, 2008: 8:19 AM ET
