Wells Fargo (WFC) Q3 Earnings In Line, Revenue Disappoints

Have you been eager to see how Wells Fargo & CompanyWFC performed in Q3 in comparison with the market expectations? Let's quickly scan through the key facts from this San Francisco-based money center bank's earnings release this morning:

In line Earnings

Wells Fargo came out with adjusted earnings per share of $1.04, in line with the Zacks Consensus Estimate. Results excluded mortgage-related litigation accrual.

Lower revenues and higher expenses were recorded.

How Was the Estimate Revision Trend?

You should note that the earnings estimate for Wells Fargo depicted optimism prior to the earnings release. The Zacks Consensus Estimate has increased around 1% over the last seven days.

Also, Wells Fargo has an impressive earnings surprise history. Before posting in-line earnings in Q3, the company delivered positive surprises in all the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 2.99% in the trailing four quarters.

Wells Fargo & Company Price and EPS Surprise

Wells Fargo & Company Price and EPS Surprise | Wells Fargo & Company Quote

Revenue Came In Lower Than Expected

Wells Fargo posted revenues of $21.9 billion, lagging both the Zacks Consensus Estimate of $22.3 billion as well as the year-ago number.

Key Stats to Note:

  • Pre-tax pre-provision profit (PTPP) : $7.6 billion
  • ROA (net income to average assets): 0.94%
  • ROE (net income applicable to common stock to shareholders' equity): 9.06%
  • Results included discrete litigation accrual of $1 billion or 20 cents per share
  • Returned $4 billion to shareholders through common stock dividends and net share repurchases

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Wells Fargo. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. It all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. )

How the Market Reacted So Far

Following the earnings release, Wells Fargo shares were down more than 1% in the pre-trading session. This is in line with what the stock witnessed in the prior-day's session. Clearly, the initial reaction shows that the investors have not considered the results in their favor. However, the full-session's price movement may indicate a different picture.

Check back later for our full write up on this Wells Fargo earnings report later!

4 Stocks to Watch after the Massive Equifax Hack

Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?

Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor's Guide to inform readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.

Get the new Investing Guide now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Wells Fargo & Company (WFC): Free Stock Analysis Report

To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

Earnings Investing Stocks

Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More