San Carlos Train Station – Built in 1888
Wells Fargo Expects $3 Billion Profit for Q1, 2009
NEW YORK (CNNMoney.com) — Wells Fargo delivered a much-needed bit of good news for the banking sector Thursday, saying it expected to book a better-than-expected profit of approximately $3 billion in the most recent quarter.
The announcement not only sent Wells Fargo (WFC, Fortune 500) stock 25% higher in midday trading, but boosted shares of many other big banks as investors bet that Wells’ peers may also post results that exceed Wall Street’s estimates. Bank of America (BAC, Fortune 500), which will report its results on April 20, gained 30%.
Originally slated to deliver its results later this month, the San Francisco-based Wells Fargo issued guidance for the first quarter, saying it expected to report a record profit of about $3 billion, or 55 cents per common share. Expectations are for the company to book a profit of 28 cents a share, according to Thomson Reuters.
“Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group,” Wells Fargo CEO John Stumpf said in a statement.
Wells Fargo attributed the strong results to healthy lending margins driven by lower interest rates, fewer additional costs related to its purchase of Wachovia and a boom in mortgage activity.
Mortgage applications surged during the quarter, with the company reporting $83 billion in applications during the month of March alone.
