Wells Fargo & Company (NYSE:WFC) outlined its second quarter earnings results on Tuesday 14th July 2020 before market open.
The banking service provider, reported $ 0.66 loss per share for the quarter, missed the consensus estimate of $ 0.20 loss per share by $ 0.46 or 230 percent.
The firm had revenue of $ 17,836.00 million for the quarter, compared to the consensus estimate of $ 18402.80 million. The revenues fell short of analysts estimates by $ 566.8 million or 3.08 percent.
The financial report showed revenues down 17.36 percent versus second quarter of last year.
Analysts estimates are from Thompson Reuters, exclude one time gain or loss
The Company also announced that it expects to reduce its third quarter 2020 common stock dividend to $0.10 per share from $0.51 per share, subject to approval by the Board of Directors at the customary time at the end of July.
The net loss for the second quarter include, (i) $ 1.2 billion of operating losses, including $ 765 million of customer remediation accruals for a variety of matters, (ii) $ 382 million of personnel, occupancy and technology expense related to COVID-19 (non-interest expense), (iii) $ 295 million of fee and interest waivers for customer accommodations in response to COVID-19 (1), (iv) $ 346 million of net gains on equity securities from deferred compensation plan investment results, which were largely offset by $ 349 million of employee benefits expense.
Wells Fargo, Chief Executive Officer Charlie Scharf, said, We are extremely disappointed in both our second quarter results and our intent to reduce our dividend. Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter, which drove the $8.4 billion addition to our credit loss reserve in the second quarter. While the negative impact of the pandemic is unprecedented and many of our business drivers were negatively impacted, our franchise should perform better, and we will make changes to improve our performance regardless of the operating environment.
