Wells Fargo Still in Control – Zacks Tale of the Tape
Source: http://www.zacks.com/stock/news/17058/Wells+Fargo+Still+in+Control+-+Zacks+Tale+of+the+TapePosted on Wednesday, January 28th, 2009 | In Stocks to Watch
Wells Fargo & Co. (WFC) posted a surprise quarterly loss on Wednesday but its share price still gained 25% as the second-largest U.S. home lender retained its dividend and said it would not need more federal aid to absorb the troubled Wachovia Corp.
For the fourth quarter, Wells Fargo reported a net loss of $2.55 billion, or 79 cents per share, compared with a profit of $1.36 billion, or 41 cents, a year ago. Excluding numerous charges, it had a profit of 41 cents, topping the consensus estimate of 34 cents.
Wells Fargo Chief Financial Officer Howard Atkins said that a $5.6 billion credit reserve and the $3.9 billion provision related to the Wachovia takeover had led to the quarterly loss. The company also took charges of $294 million as some of its customers affected by Bernard Madoff’s alleged Ponzi scheme were unable to pay their loans.
In spite of the quarterly loss, the company maintained its quarterly dividend of 34 cents per share, putting to rest speculation that it might need to slash its distribution in order to improve liquidity. Wells Fargo said it didn’t need more taxpayer funds in addition to the $25 billion it has already received to avert the ongoing financial crisis.
Wells Fargo, along with JP Morgan Chase (JPM), are widely viewed as the two banks that are holding up better than their peers in the current downturn. Wednesday’s update from Wells Fargo, coupled with hope that the Obama administration may absorb toxic assets, sent the shares up as high as $20.50 at midday on the New York Stock Exchange.
“WFC” Free Stock Analysis: Buy? Sell? Hold?
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