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Wells Fargo revenue falls short, shares drop

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Wells Fargo & Co.

shares fell 3.5% in premarket trades Friday after it said its second-quarter net income declined to $3.12 billion, or 74 cents a share, from $6.04 billion, or $1.38 a share in the year-ago quarter. Excluding an impairment of 8 cents a share for its venture capital business and other items, earnings were 82 cents a share in the latest quarter. Second-quarter revenue dropped to $17.02 billion from $20.27 billion. Analysts expected Wells Fargo to earn 80 cents a share on revenue of $17.48 billion, according to FactSet estimates. “Looking ahead, our results should continue to benefit from the rising interest rate environment with growth in net interest income expected to more than offset any further near-term pressure on noninterest income,” CEO Charlie Scharf said. “We do expect credit losses to increase from these incredibly low levels, but we have yet to see any meaningful deterioration in either our consumer or commercial portfolios.” Shares of Wells Fargo have fallen 19.3% in 2022. The Financial Select SPDR ETF has lost 21.3% in 2022 and the KBW Nasdaq Bank Index is down by 25.6%. The S&P 500 has fallen 20.5% and the Dow Jones Industrial Average is off by 15.7%.

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