Wells Fargo's stock falls; Jefferies says EPS looks like a miss
Wells Fargo & Co.'s stock slumped 3.0% in midday trade Friday, as the bank looks set to extend its streak of reporting disappointing quarterly results. The bank reported earlier a first-quarter profit and revenue that beat expectation, which initially sent the stock to a premarket gain of as much as 2.2%, before it reversed course. It is on track to decline on the day that the past five quarterly reports were released, and on the day of the past 10 of 11 reports. Wells reported first-quarter EPS of $1.12, above the FactSet consensus of $1.06, but Jefferies analyst Ken Usdin said the EPS looks more like 95 cents, if gains from accounting changes, a reserve release and elevated operating losses are excluded. Usdin also noted that net interest income and core fees missed, although core expenses were modestly better. The stock has tumbled 15.8% year to date, while the SPDR Financial Select Sector ETF has slipped 1.4% and the S&P 500 has eased 0.5%.
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