Jamie Spencer
Fourth-Quarter Earnings Exceed Expectations
Wells Fargo reported better-than-expected earnings for the fourth quarter of 2024, sending shares up over 5% on Wednesday. Here are the key highlights compared to Wall Street’s expectations:
- Adjusted Earnings Per Share: $1.58 vs. $1.35 expected
- Revenue: $20.38 billion vs. $20.59 billion expected
The San Francisco-based lender’s net income rose 47% year-over-year to $5.1 billion, or $1.43 per share, from $3.45 billion, or 86 cents per share, in the same period a year ago. After excluding severance costs of 15 cents per share, the bank reported adjusted earnings of $1.58 per share, exceeding analyst estimates compiled by LSEG.
Optimistic 2025 Net Interest Income Guidance
Wells Fargo provided strong guidance for 2025, projecting net interest income (NII) to grow by 1% to 3% from the 2024 figure of $47.7 billion. This metric, which measures the difference between interest earned on loans and paid on deposits, is a key indicator of a bank’s profitability.
CEO Highlights Significant Progress
In a statement, CEO Charlie Scharf expressed confidence in the bank’s direction:
“Our solid performance this quarter caps a year of significant progress for Wells Fargo. Our earnings profile continues to improve, we are seeing the benefit from investments we are making to increase our growth and improve how we serve our customers and communities, we maintained a strong balance sheet, we returned approximately $25 billion of capital to shareholders, and we made significant progress on our risk and control work.”
Key Financial Highlights
- Investment Banking Fees: Jumped 59% year-over-year to $725 million in Q4 2024.
- Share Repurchase: The bank bought back 57.8 million shares, equivalent to $4 billion, during the fourth quarter.
- Stock Performance: Shares surged nearly 43% in 2024 and are up 6% so far in January 2025.
Market Reaction
Wells Fargo’s strong earnings and optimistic outlook fueled a rally in its stock, with shares rising over 5% in morning trading. The robust performance underscores the bank’s progress in improving its profitability and addressing risk management.
