Wells Fargo issues an early earnings surprise, boosting the market

Posted Apr 9th 2009 9:00AM by Mark Fightmaster
Filed under: Earnings Reports, Wells Fargo (WFC)

Wells Fargo (NYSE: WFC) is set to report earnings on April 22, but the bank stated this morning that it expects to report first-quarter income of nearly $3 billion. WFC's preliminary first-quarter earnings are 55 cents per share, compared to 60 cents per share a year ago. These figures are after "preferred dividends," which include $372 million in dividends paid to the government - these charges are taken into account.

The early reports of earnings of 55 cents per share are far better than the consensus estimate for 31 cents per share. WFC added that total revenue for the quarter should be $20 billion.

Needless to say, this news has boosted the bank's shares and the overall market this morning. At last check (at 11:30 am), the stock was 23% higher, placing the shares in the $18 region. Technically, this is a significant move, but there is a caveat. I am a bit concerned about the equity's descending 20-week moving average, as it is descending toward the $18 region. Watch for the equity to battle this overhead resistance today and possibly next week. If the stock is going to move higher, it will have to take out this resistance.

if this resistance isn't enough, WFC's 10-month moving average is looming overhead as well. Don't get me wrong here, this is great short-term news for WFC. However, will this be enough to spark a longer-term trend for the stock? There is a good deal of overhead resistance the shares must overcome, let's see if the stock can close atop its 20-week moving average when the closing bell rings today.

Tags: credit crunch, CreditCrunch, earnings reports, earnings surprise, EarningsReports, EarningsSurprise, featured, inthenews, Wells Fargo, WellsFargo

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Reader Comments (Page 1 of 1)

4-09-2009 @ 11:12AM

Iridium said...

What I want to know is how Wells Fargo could make that much money. It seems impossible.

Perhaps the recent change to Mark to Market allowed them to cook the books.

There is no real way that bank could have made that much during a quarter of massive recession. The traders won't care though. They won't care to dig deeper into the real reasons whay they could boost profit.

All that matters is the bottom line. If they found 10,000 dead bodies in a basement of a Wells Fargo building it wouldn't matter as long as the company posts a profit and people can make money on a trade.

4-09-2009 @ 3:05PM

Arnold said...

How is this possible? A company that needed billions of dollars in Gov money-I'm sorry Taxpayer money-makes an outrageous claim of a profit?
Has the new laws on market to market reporting been forgotten so quickly?
The investors and others will be bruised very badly when the truth comes out.
The sad part is that many people will be hurt even worse than they have been, because their 401k and mutual funds took the bait and bought some of the BS bank stocks.
We need new laws for loss/profit reporting that favor the little people-the public.