Wells Fargo and Company (WFC) announced its fourth-quarter earnings on Friday before the market opened. With a market capitalization of 223.285 billion and an average trading volume of 25,642,864 shares, the company reported the earnings for this quarter that ended September 2021.   

Q4 2021
  • Revenue: $20.9 billion
  • EPS (diluted): $1.38
  • Net Income: $5.8 billion
FY 2021
  • Net Income: $21.5 billion
  • EPS (diluted): $4.95
Financial Highlights  
  •  Revenue of $20.9 billion, up 13%  
  • Net gains from equity securities of $2.5 billion ($1.9 billion net of noncontrolling interests), up from $884 million in 4Q20 and $869 million in 3Q21  
  • Noninterest expense of $13.2 billion, down 11% 
  • Effective income tax rate of 22.9%  
  • Average loans of $875.0 billion, down 3%; period-end loans of $895.4 billion, up 1% from 4Q20 and up 4% from 3Q21  
  • Average deposits of $1.5 trillion, up 7% 
WFC CEO’s Statement  

“As I look back on my slightly more than two years at Wells Fargo, I’m incredibly proud of what our team has accomplished as we remake this incredible franchise. And those on the front lines have worked fearlessly and tirelessly to support our customers through incredibly difficult circumstances. In 2021, we improved our financial returns, including reducing our expenses and returning a significant amount of excess capital to our shareholders by increasing our dividend and repurchasing $14.5 billion of common stock. We also had strong deposit growth and while loan demand was weak early in the year, loans grew 5% in the second half with growth in both our consumer and commercial portfolios. As the economy continued to recover, we saw increased consumer spending, higher investment banking fees, higher asset-based fees in our Wealth and Investment Management business, and strong equity gains in our affiliated venture capital and private equity businesses. We continued to manage credit well and the strong economic environment helped reduce charge-offs to historical lows and our results benefitted from reductions in our allowance for credit losses,”

Chief Executive Officer Charlie Scharf commented.

Analysts’ Estimates  

Analysts had estimated the earnings to stand at $1.12 per share while the revenue was expected to be $18.78 billion. The analysts’ total revenue estimate for the fiscal year 2021 was $76.35 billion, while the earnings were predicted at $4.69 per share.  

Earnings History   

Wells Fargo and Company (WFC) has consecutively beaten the estimates. The company reported a revenue of $20.23 billion in Q3 with a 9.05% y-o-y growth. The EPS stood at $1.22 against the expected EPS of $0.94, giving a surprise of 29.19%. The net income reported was $5.12 billion.  

In the second quarter ended in June 2021, the EPS was beaten by a surprise of 47.31%. In the fourth quarter of 2020, the earnings beat the estimates by 13.31%.  

For the fiscal year 2020, the revenue decreased by 29.27% y-o-y, but the cash on hand had increased. The net income had also fallen in the last fiscal year.  

Forecast  

For the next quarter, the analysts expect the earnings to stand at $0.8 while the revenue would be $17.58 billion.  

On Thursday, the WFC stock traded at $56.00, down 0.40 points (0.71%), but the stock rose in the after-hours trade and trades at $56.70 (+1.25%) pre-market.  

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