Wells Fargo said earnings for the three months ending in December came in at 60 cents per share, including a 33 cents per share hit from litigation costs, a figure that fell well shy of the Street consensus forecast of $1.12 per share. Group revenues also missed forecasts, falling 5.2% to $19.9 billion as net interest income fell 11.1% to $11.2 billion.
Non-interest expenses, Wells Fargo said, rose $2.3 billion from the same period last year to $15.6 billion, while its net interest margin, a key measure of profitability, fell 13 basis points from the third quarter to 2.53%.
“During my first three months at Wells Fargo my primary focus has been on advancing our required regulatory work with a different sense of urgency and resolve, while beginning to develop a path to improve our financial results. This work is necessary to build the appropriate foundation for us to move forward," Scharf said. "Wells Fargo plays an important role for our country, and we know that ultimately our actions and results will dictate when that trust is fully regained. And while the work is substantial, I am confident that with the appropriate prioritization of resources, processes, and management attention, we can accomplish what is expected of us,"
"In addition, even in my short time at the company, it is clear that our opportunities to improve our performance are substantial when we finish this work," he said. "Our cost structure is too high, and I believe there are many areas where we will be able to increase our rate of growth. While it is too early to put time frames around these goals, we will be diligent in pursuing them and I am confident the opportunities are meaningful."
Wells Fargo shares were marked 4.36% lower in early Tuesday trading following the earnings release to change hands at $50.01 each, a move that trims its six-month gain to around 7%.